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By Elizabeth Trotta | Yahoo! Finance

The latest housing data offer the bulls a glimmer to go on, but it’s difficult to distinguish signs of stabilization from signs of life. The data come amid an ongoing debate as to whether housing has hit or has yet to hit bottom.

Mortgage giant Freddie Mac said Thursday the average 30- and 15-year mortgage rates increased last week to 3.9% and 3.13%, respectively. The “relatively stable” rates came amid signs that inflation remains in check, according to Frank Nothaft, vice president and chief economist at Freddie Mac.

Meanwhile, existing-home sales were down in March but continue to outpace year-ago levels, according to the latest release form the National Association of Realtors on Thursday.

Home prices are showing further signs of stabilizing but an unexpected decrease in key inventory could be holding the market back, according to the NAR report. “We were expecting a seasonal increase in home listings, but a lack of inventory has suddenly become an issue in several markets with not enough homes for sale in relation to buyer interest,” said NAR chief economist Lawrence Yun. “Home sales could be held back because of supply factors and not by demand – we’re already seeing this in the western states and in South Florida.”

Housing Outlook

The National Association of Home Builders reported its first decline in homebuilders’ confidence in seven months on Monday. But as Yahoo! Finance’s Daily Ticker reported, that may be just a blip in the fledgling housing recovery:

“Another year from now if prices stay flat and rents rise another 4, 5 or 6%, then the decision to rent or buy will be firmly in favor of buying rather than renting,” Mark Zandi, chief economist of Moody’s Analytics, said on the show, adding that’s already the case in some parts of the country.

Count Bank of America CEO Brian Moynihan among the optimistic. He said in an earnings call on Thursday that the mortgage business has reached a bottom and is ready for an upturn.

NAR’s Yun also expects the market to strengthen in 2012. “The recovery is happening though not at a breakout pace, but we have seen nine consecutive months of year-over-year sales increases,” he said. “With job growth, low interest rates, bargain home prices and an improving economy, the pent-up demand is coming to market, and we expect housing to be notably better this year.”

Who’s Buying?

Investors accounted for 21% of existing home sales in March, vs. 23% in February and 22% in the same month a year earlier, according to the NAR data. First-time buyers accounted for 33% of transactions in March, up from 32% percent in February and 33 percent in March 2011.

The 4-week moving average of the Mortgage Bankers Association’s Market Composite Index, a measure of loan application volume, increased 1.6% after application volume jumped 6.9% last week. That marks a reversal from the week prior, when the 4-week moving average was down 2.08%. When you break the 4-week moving average down though, it’s still down 0.52% for purchases — but it got a lift from refinances which are up 2.36%. In summary, there was an uptick in refinancing, a change from the week prior. Refinancing applications make up 75.2% of mortgage activity, according to the latest survey.