Mortgage applications rose last week as refinancing jumped by the most since March and purchases climbed to the highest level in three months, the Mortgage Bankers Association said today.

The association’s index of applications to purchase a home or refinance a loan increased 11 percent to 493.1 in the week ended July 3, from 444.8 in the prior week. The group’s refinancing gauge surged 15 percent, while the index of purchases gained 6.7 percent, Bloomberg reported.

Foreclosure-driven declines in prices have brought more homes within reach of buyers who qualify for credit, helping to stabilize demand. At the same time, unemployment is rising and borrowing costs are edging back up, indicating any rebound for the housing industry will be slow to take hold.

“Prices are coming off toward more affordable levels,” David Semmens, an economist at Standard Chartered Bank in New York, told Bloomberg.

Today’s report showed the mortgage bankers’ refinancing gauge increased to 1,707.7 from the previous week’s 1,482.2, which was the lowest reading since November 2008. The purchase index rose to 285.6 from 267.7.

In a sign that the housing slump may be bottoming out, a July 1 report from the National Association of Realtors showed the number of Americans signing contracts to buy previously owned homes rose in May, the fourth consecutive monthly increase, Bloomberg said.