Modest improvement in number of new home loans.

The housing market is still showing some modest signs of growth with a gradual increase in the number of new home loans taken out in February 2013, reports the Housing Industry Association (HIA).

Despite mixed results for the month, the market is heading in the right direction and lending is now back to the same levels seen in October last year, according to the HIA's chief economist Dr Harley Dale.

"We're still not firmly on the path back to the healthy levels of new home lending which would be consistant with the strong residential construction recovery the economy and population requires," said Harley Dale.

The construction and purchase of new homes for owner occupiers grew by 1.2 percent in February compared to loans for established houses and refinancing which saw a 2 percent spurt.

State by state, the ACT saw the largest growth in home loans for owner occupiers for construction and purchase of new homes, increasing by 21.8 percent. Queensland recorded 14.9 percent growth in the same sector, 7.0 percent for New South Wales and the Northern Territory. However, Victoria saw a drop by 1.2percent, similarly a 1.7 percent decrease in South Australia, 11.0 percent for W.A. and 13.0 percent for Tasmania.

Australians are now witnessing some of the lowest home loan interest rates on record thanks to the RBA slashing official interest rates to 3.0 percent. Many lenders are now offering fixed interest rate home loans below 5 percent and variable rates sitting just above 5 percent. Anyone looking to take advantage of the current low in interest rates can compare the markets best home loans here.

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