It has been written many times, many ways: the real estate market has to hit bottom before it can finally find its way up. With the way low mortgage are being ignored by home buyers, perhaps the theory is gaining a stronger proof that it is high time the housing market be left to free fall.

It has been reported that mortgage rates have not been as low as they currently are. Earlier in September, the 30-year fixed rate mortgages are at an all-time low of 4.32%. Even with that figure, people are still not rushing to take advantage of the low mortgage rates; the total number of people who bought homes and refinanced is even higher in 2003 when mortgages were 1.5 percentage points higher than what we have now.

Refinancing may have seen a little boost, especially from January to June of this year, but it’s not a big a dent as was seen last year or even in 2003. New home sales were at its second slowest pace on record in the month of august. Even existing home sales are not faring well, with a 19% decline from the year 2009.

IBISWorld’s housing analyst Robert Andrews said, “Anemic demand continues to hamper real (economic) growth. The housing market needs to find its true bottom before things can finally turn around.”

He is not the first to say that. And perhaps he also won’t be the last.

Numbers may be seesawing up and down but a steady growth won’t be achieved until the market free falls. Especially since nowadays, people have valid reasons not to avail of the record mortgage rates: nearly one million Americans remain unemployed and 11 million residential properties are worth far less than the mortgages on them. Hence, even with the low mortgage rates, less and less people will most likely spend on indulgences that normally usher in economic growth – such as Disney trips and new high-tech appliances.

Add to the growing woes of the consumer public is the fact that mortgage rates may be low but credit is tight. Consumers are not the only one worried, even banks are. They have become wary about lending money in this economy.

The Federal Reserve certainly did not anticipate such a reaction when it decided to push interest rates down. The Federal Reserve was actually hoping that lowering mortgage rates will not only encourage house buying but also buying that’s normally associated to new homes, like buying furniture and appliances.

All’s not lost, though. The market will still recover, but it will take time. U.S. economist for HIS Global Insight, Patrick Newport, says the country can give or take three years before the market picks up.