NEW YORK (Reuters) - The number of Americans applying for a home loan fell last week even as borrowing costs fell, but lending activity remained robust and promised to keep bankers busy.

The Mortgage Bankers Association said its market index, a measure of weekly mortgage activity, fell 6.8 percent in the week ended Feb. 6 to 797.8.

At the same time, the trade group's purchase index, a gauge of new requests for loans to buy homes, fell 9.4 percent to 402.2.

"While we're seeing routine seasonal declines, the volume we are seeing suggests we're on track to producing more loan applications in 2004 than in 2003," said Ray McKewon, executive vice president of San Diego-based Accredited Home Lenders on Tuesday before the report was released.

McKewon, whose firm focuses more on lending for home purchases and debt consolidation, is not alone.

On Tuesday, Countrywide Financial Corp., one of the top lenders in the United States, reported that average daily application volume rose 33 percent $1.8 billion in January from December. At the same time, Countrywide said that its pipeline of applications in process rose 16 percent in January to $38 billion.

Thomas Meyer, president of Homebuilders Financial Network, a Miami-based firm that sets up and operates mortgage finance companies for large U.S. builders, said Tuesday his business has seen an increase of 16 percent this year compared to the same period a year ago.

"With rates not moving up, you have got a pretty strong environment. The 30-year mortgage rate is nearly where it was a year ago," said Meyer.

Meyer cited a Las Vegas builder's steady business as an example of the resilient demand for homes. According to Meyer, this builder constructs 1,400 homes a year and this year's stock has already been presold.

"I'm sure affordability is a motivating factor. Is that all rate driven, I don't think so," said Meyer.

Meanwhile, MBA's refinancing index, a gauge of demand for home loan refinancings, slipped 4.7 percent to 3,099.1 from the previous week's 3,250.6 even as 30-year mortgage rates fell 0.03 percentage point last week to average 5.6 percent.

"Between December and January, mortgage rates came down a pretty healthy amount, about 20 to 25 basis points," Frank Nothaft, chief economist for Freddie Mac, said Tuesday. "With a decline of that magnitude, that is going to increase refinance applications."

But even if rates remain at current levels, fewer home owners will have the motivation to refinance their loans with each passing month and more applications will be related to home purchases.

"With very modest mortgage rates again this year, that is going to translate into strong housing demand," said Nothaft.

Last week, refinancings accounted for more than 50 percent of the week's activity.

Refinancings have buttressed the U.S. economy through good times and bad because they have allowed consumers to slash borrowing costs and extract equity from their homes.

Last week, Freddie Mac, the No. 2 source of housing finance in the United States, announced that cash-out refinancings hit $139 billion last year, the highest since the housing giant started keeping records in 1985.

Economists at Freddie Mac believe that the positive effect of cash-out refinancings has a four-fold positive effect on the U.S. economy.