Home loan demand fell for a third straight week, even as fixed mortgage rates slid near all-time lows, with potential buyers still unnerved by the jobs market, Mortgage Bankers Association (MBA) data showed on Wednesday.

Loan applications to buy homes and refinance declined last week despite average 30-year mortgage rates dropping 0.03 percentage point to 4.44 percent. At a record low dating back to 1990, the rate fell to 4.43 percent last month.

"I don’t think we’re going to see massive dips like we did before, but housing can’t recover until employment recovers," said Margaret Kelly, chief executive of RE/MAX in Denver.

The housing market has been whip-sawed by a surge in demand before, and a plunge in demand after homebuyer tax credits ended on April 30.

Now the market enters a seasonally slower period, when sales typically slow after the school year begins and the winter approaches.

The industry group’s mortgage market index that includes both purchase and refi applications fell 1.4 percent last week, seasonally adjusted, with purchase loan demand down 3.3 percent and refi requests off 0.9 percent.

Overall loan demand has grown over the past year, but refinancing far overshadows home buying, the MBA said. Applications to buy homes sank 38 percent from a year ago while refinancing requests jumped 51 percent.

About eight of every 10 loans requested are for a refinance rather than a purchase. (Reuters)