COEUR d’ALENE — The weak economy has given birth to fantastic mortgage interest rates, but it also has killed the confidence prospective homebuyers have in their jobs.

The result is far fewer people are seizing the opportunity of historically low rates and bargain basement home prices. And for next year, experts see fewer people applying for mortgages.

The Mortgage Bankers Association said this week that regardless of which direction mortgage rates and the economy go — up or down — its economists predict another tough year in 2012. It expects loan origination volumes to be at the lowest level since 1997. MBA predicts loan originations to be down 25 percent in 2012 compared with this year.

Refinance originations are expected to fall despite low mortgage rates as economic uncertainty lingers and fewer eligible borrowers remain, the MBA said.

Low mortgage interest rates have been in place for a while and helped nudge the market in a positive direction in North Idaho, but the real estate market still has a ways to go, real estate industry observers here say.

“We aren’t seeing a large volume of home-loan applications like people would expect,” said Susan Semba, vice president of homeownership for the Idaho Housing and Finance Association.

Most buyers she has seen are people who don’t need to sell a house they already have, which can be a massive undertaking.

“Although we are maintaining a narrow lead over last year for number of sales, buyers are not feeling a compulsion to act,” said Kim Cooper, a real estate broker and a spokesman for the Coeur d’Alene Association of Realtors. “With rates hovering below 4 percent for quite some time there is little fear that rates will rise abruptly enough to create a significant loss.”

Katie Marcus, a manager for residential lending at Mountain West Bank, said it’s a prime time to buy with the current interest rates and home prices low.

“But a lot of people are nervous about employment,” Marcus said.

Other people are waiting to buy because they think rates and home prices could still go lower, she said.

“They think the market will be better later,” she said.

Marcus said the number of units closed on in August and September was down from a year earlier.

The market in North Idaho has been losing one of its primary segments — the homeowners who in the past looked to move up to larger homes, she said.

Also, she said there are fewer investors.

“It’s more difficult to find financing once somebody goes past four loans,” she said. So investors today have to have cash, she added.

Michael Smith, a senior vice president for Idaho Independent Bank, said loan volume is up for the bank in both purchases and refinancing due to the historic market conditions.

But those who are getting those historic low rates have excellent credit, lots of cash for a down payment, and ample income from a stable job, Smith said.

To get those rates, buyers will likely have a credit score of 720 or better and be around 70 percent on the loan-to-value ratio, which is the loan amount divided by the purchase price or appraised value of the property.

If the property value is $500,000 and the loan amount is $350,000, the loan-to-value ratio is 70 percent.

Smith said that from today on, the forecast for homes sales and mortgage rates is murky.

“We’re nervous about what the winter brings for home sales and new-home construction,” Smith said.

The bank has seen a surge in new-home construction, and has been aggressively seeking those loans, he said.

An encouraging trend for bankers, he said, is that more of the buyer market is now made up of people who will live in the home for years.

During the boom, a lot of the buyers were investors and those looking to flip a house.

“That’s what is going to cure the market, people buying for their own needs instead of speculating,” Smith said. “That’s a good thing for us.”

With more people buying for their own needs, the inventory of existing homes could be depleted.

Investors and those flipping homes put the homes back on the market not long after buying them, which doesn’t change the inventory.

The week of Oct. 6, the average 30-year conventional fixed mortgage rates fell below 4 percent for the first time in history, following a sharp drop in 10-year Treasuries as concerns over a global recession grew, according to Freddie Mac. A year earlier, the 30-year fixed-rate mortgage averaged 4.27 percent

The 15-year fixed, a popular refinancing option, also fell to the lowest level on record for the sixth consecutive week.

On Thursday, Freddie Mac said rates on the 30-year fixed-rate mortgage averaged 4.12 percent for the week, up from 3.94 percent from the prior week.

But even with the sharp increase, mortgage rates remain near their 60-year lows.

Frank Nothaft, Freddie Mac’s vice president and chief economist, said, “The economy added 103,000 workers in September, aided by the return of striking Verizon workers.”

Additionally, revisions to July and August jobs figures added a total of 99,000 jobs to payrolls, he said.

“However, these job gains are still not large enough to bring down the current unemployment rate of 9.1 percent,” Nothaft said.

Cooper said housing inventory has affected the market more than mortgage interest rates.

“Although we show fewer listings than at this time last year, most of those listings are priced below last year’s prices which means there are plenty of bargain priced properties — not just homes, but commercial and vacant land parcels as well,” Cooper said. “We think people are comfortable that today’s environment will continue, so there is not as much concern that competition will cause them to lose an opportunity.”

In the next three months, he and others with the association expect the current interest-rate environment to hold, at least as long as catastrophic weather or economic issues don’t erupt.

“Although we are not economists, we do not expect any radical change in rates in the immediate future,” he said.