THE percentage of first home buyers in the market has swelled to the highest level on record, data out today shows.

First home buyers now make up 28 per cent of all dwellings financed, which is the largest proportion recorded since the Australian Bureau of Statistics began collecting the data in 1991.

The number of housing loan approvals rose by 0.9 per cent in April, the seventh monthly rise in a row. The figure was still below market expectations of a 1.5 per cent increase.

The value of home loan approvals was up by nearly 2 per cent.

The average size of the first home buyers' loan eased slightly in the past month to $283,400 from nearly $286,000.

The average first home buyers' loan, the second highest average loan value in the housing series, is nearly $20,000 higher than the average loan size for all owner-occupied housing commitments.

First home buyers have been flocking to the market in recent months, buoyed by a substantial boost to the Federal Government's first home owners grant to $14,000 for existing homes.

Since the boost was announced, the average size loan for first home buyers has increased by nearly $20,000.

First home buyers opting for a newly built house can claim up to $21,000 in government grants.

The boost to the grant was originally intended to end at the end of this month, but thanks to changes in the Budget will be continued in full until October 1.

From then, it will be halved to $10,500 for existing homes, and $14,000 to new homes. The boost will end on December 31, although the existing $7000 first home owners grant will continue.

Westpac senior economist Andrew Hanlan said the deadline was encouraging first home buyers to rush to the market.

"Where other investors have more time to make their decision, the nature of the (first home grant) deadline means they have to bring forward those decisions," he said.

Mr Hanlan said there was a "dramatic improvement" in housing affordability, with variable mortgage rates now the lowest since 1968.

Economists had forecast a 1.5 per cent increase in the number of owner-occupier housing finance commitments.

The figures also revealed a jump in the number of people turning to fixed rate loans, suggesting Australians think the run of interest rate cuts has come to an end.

Mr Hanlan said there was upward pressure on fixed rates, but added the Reserve Bank could cut rates further before the end of the year.