A bottom in the mortgage market is too early to call, but a few indicators are emerging to suggest demand is increasing, even before the full effect of the October first-home buyers' grant increase, and Tuesday's 75-point drop in the cash rate to 5.25 per cent.Australian Finance Group, the largest broker (or aggregator of mortgage brokers) yesterday reported its October sales data. These are the strongest business volumes since November 2007.First-home buyers are driving the sales, increasing two percentage points to 16.4 per cent in October, increasing each month for the last four, since the June trough of 10.6 per cent. Refinancing increased in October to 40.9 per cent of loans from 39.1 per in September, at the expense of property investors, which fell from 31.4 per cent to 29.9 per cent.Fixed lending volume continued to fall in October, comprising just 4.5 per cent of mortgages, after peaking above 20 per cent for all seven months to March 2008.Standard variable increased to 51.6 per cent, with basic variable 21.2 per cent, equity 14.6 per cent and intro 8.1 per cent.The AFG figures are well supported by another market participant, with Jennifer Nielsen, Loan Market & X Inc Finance chief executive officer, saying leads for the two groups were 30 per cent higher in October compared to September and August, with the increase over July eight per cent."Four out of five enquiry calls in October to the call centre were first-home buyers, and it was down as low as 18 per cent at the beginning of the year. The balance is an increasing number of borrowers trying to get out of fixed rates."Leads for the REA Home Loans brand in October were 30 per cent higher than September, twelve per cent up on August and three per cent higher than July."Nielsen adds the numbers of returning expats are also increasing, generally looking for loans from $800,000 to the several millions."There has also been a marked increase in the number of refinances falling over due to valuations coming in lower, often below what properties would realistically sell for."