Even if the Federal Reserve has committed itself to keep the interest rates very low over the next two years and the home prices remain cheap, there are still very few people who are buying homes and taking on mortgage rates. In fact, according to Mortgage Bankers Association, home lending in the country has dipped further, making it the lowest since 14 years ago.

This year, loan mortgage will account to only $1 trillion, which is only one-third of the total amount in 2010.

In a paper called A Rentership Society, Morgan Stanley believed that all the former assumptions about homes are "seriously challenged." It seems like people no longer viewed them as excellent investments for their money and that the values of their properties will go up in due time.

What Are the Main Causes for the Lack of Growth?

The lack of growth or the decline of home lending, as well as mortgage loans, is brought about by a lot of factors.

Topping the list is the unsure economy. Even the country has already picked up itself from the horrible recession in 2008, it still faces a number of drawbacks, the latest of which is the latest rating downgrade it received from Standards & Poor's.

Moreover, a lot of consumers became a lot smarter when it comes to their finances. They learn how to control their balance sheets more, opting to pay off their debts first over other things. TransUnion, a credit bureau, revealed that debts on credit cards had dropped to $4,699 for every borrower. It's the lowest it has ever been for the past 10 years.

There's still the issue of foreclosures, a lot of which can be attributed to the subprime mortgage fiasco. High-risk borrowers could no longer pay up their remaining mortgage loans and cannot easily qualify for a mortgage refinance. Thus, they went on default with their repayments.

Other property owners are tied to a refinance mortgage, which is usually taken out in order to reduce their monthly mortgage interest rates. Some of them are even experiencing a burnout, perhaps after refinancing for a lot of times over the past years.

Experts are also putting the blame on underwater loans. These are the types of mortgage home loans where the value of theFlorida mortgage deptis much higher than that of the property, making it harder for the owner to sell the home or even pay off the existing debt.

Michael Fratantoni of Mortgage Bankers Association also believed that the young adults right now don't feel the rush to purchase a home right away, even if they seem to have a stable job.

Now Is the Best Time for Home Lending

Nevertheless, potential home buyers should not feel too apprehensive about applying for mortgages. As mentioned, the interest rates are very low, and it's possible to lock your loan in a fixed rate for 25 years or more. Also, banks and other mortgage lenders have become more lenient with regards to Mortgage Refinance applications. Though they're still keeping their eyes on credit history, among other things, they no longer ask often on every tiny item found in your bank statement.