Mortgage applications remain low despite record rates

Even though mortgage rates are at their most affordable levels in decades, relatively few borrowers appear to be trying to take advantage of them.

Mortgage applications dropped 4.3 percent during the week ending September 30, with applications for refinancing falling by 5.2 percent, according to the Mortgage Bankers Association. Analysts say there appears to be a lack of demand for home loans.

"Interest rates continued to fall last week, driven by the latest Federal Reserve actions to invest in longer-term Treasury and mortgage securities, but potential borrowers largely remained on the sidelines, seemingly unimpressed by the lowest (by any measure) mortgage rates since the 1940s," said Mike Fratantoni, MBA's vice president of research and economics.

Over the past four weeks, which have been dominated by affordable rate conditions, overall mortgage volume is up just 2.44 percent.

One factor in keeping applications low may be stringent qualifications mandated by banks which make it harder to qualify for a loan. Borrowers may want to review their credit report to see if there are any improper marks which are hurting their three-digit scores.