In early September, interest rates for U.S. home loans dropped to their lowest levels in over a year. Despite these rate decreases, less homebuyers got off the fence and into new homes. This carried over to the decrease in loan applications, which were down 12 percent on the year ending in August.

The coming months are especially crucial for home loan rates, as the Federal Reserve completes its “tapering” of Bond purchases. The program was credited with boosting the housing industry since its inception in late 2012. And since home loan rates are tied to Mortgage Bonds, any significant Bond market activity impacts financing for housing.

According to the August National Housing Survey conducted by Fannie Mae, prospective homebuyers may be hesitant to commit to mortgages due to job instability and lack of income growth, in addition to tighter credit standards.