With mortgage loan rates at their lowest since October 1998, refinancing activity reached a near-record level last week, while applications for purchases surged to their highest levels in over three months.

That, combined with a leap in home purchasing activity, left mortgage bankers busier than they've been in at least the last 10 years, according to figures released Wednesday by the Mortgage Bankers Association of America (MBA).

The housing sector has been one of the bright spots in a darkening economy for much of the year. Low mortgage rates have encouraged refinancing, putting more money in the pockets of consumers by allowing them to make lower monthly payments and extract equity from their homes.

"With long-term borrowing rates down, the only part of the puzzle that hasn't slipped into place yet is consumer confidence. Once it does, you'll start seeing economic recovery," said David Littmann, chief economist at Comerica Bank in Detroit.

Since the beginning of September, refinancing activity has surged beyond already high levels, as mortgage rates have begun approaching the lowest levels seen in a generation.

The MBA said that 30-year mortgage rates stood at 6.4 percent for the week ended Nov. 2. This was the lowest level since the week ended Oct. 2, 1998, when the rate stood at 6.36 percent.

Low rates helped push the MBA refinance index 24.3 percent higher to 5,223.2 on a seasonally adjusted basis in the week ended Nov. 2.

That represents the second-highest level for the index since the MBA began the survey in Jan. 1990. The highest level, reached in the week ended Oct. 12, was 5,252.6.

Meanwhile, purchasing activity for the week rose -- the seasonally adjusted purchase index jumped 19.7 percent over the previous week, to 318.4 from 265.9.

That represents the highest level for the purchasing index since the week ending July 20, when the index stood at 324.9.

Rising home purchasing activity combined with near-record refinancing activity drove the market index, a measure of overall U.S. mortgage market activity, to its highest level since the survey has been taken, at 1,037.9 seasonally adjusted.

The previous record for the index, 1,015.4, was reached in the week ended Oct. 12.

The MBA polls approximately 20 to 35 firms for its weekly mortgage applications survey, including the top lenders in the U.S. housing industry. The survey covers about 40 percent of all retail residential mortgage applications processed by lenders.