Rates are great but loan volume hits 13-year low

Mortgage lending is running at its lowest level in more than a decade, and 2014 is on pace to be the weakest for new mortgages since 2000, according to newly released figures by the Federal Reserve Bank of New York.

Most of the drops in mortgage lending this year have been attributed to a sharp decrease in refinancing. The New York Fed’s data does not separate mortgage lending for home purchases from those for refinancing.

Mortgage lending has averaged $357 billion per quarter for the past year ending in September, which marks the lowest amount since the middle of 2001, the Fed reported. If the fourth quarter doesn’t show a spike in lending activity-which historically it does not-2014 will go down as the worst year for mortgage volume since 2000.

The drop in lending comes at a time when mortgage rates are hovering near historic lows. Freddie Mac reported that the 30-year fixed-rate mortgage averaged 3.97 percent last week.

The rate drop in recent months has been welcome news for buyers and homeowners who have been able to take advantage, particularly after the increase last year. The 30-year fixed-rate mortgages jumped in the middle of last year from around 3.6 percent to 4.6 percent in June, before falling back down in recent months.