"The Key to the strength of the housing recovery is job growth", according to Eric Belsky, the executive directory of the Harvard Joint Center for Housing Sales.

Clearly the purchase mortgage market continues to find new lows, which, of course, means the real estate sales market is just about flat since the deadline for taking advantage of the tax credit ended April 30. Last week's Purchase Index, which tallies mortgages approved for home purchases, was the lowest since December 1996 and dropped 2.9 percent on a seasonally adjusted basis from one week earlier, according to the Mortgage Bankers Association.

Refinances continue to dominate mortgage activity with 78.7 percent of the total applications from the previous week. The average for the refinance market was up 2.6 percent.

If you've been waiting for the bottom of the market to refinance, we may be there.

The average contract interest rate for a 30-year fixed mortgage increased to 4.69 from 4.68 and points went up from 0.86 to 0.96, including the origination fee, for 80 percent loan-to-value ratio loans. Fifteen-year mortgages also saw a minimal increase from 4.11 percent to 4.12 with points increasing to 1.04 percent from 0.93 percent.

When you look at the numbers based on a four week moving average, the seasonally adjusted Market Index is up 1.5 percent thanks to a 2.6 percent increase in the Refinance Index. But, the four week moving average for the seasonally adjusted Purchase Index was down 2.4 percent, showing a continuing decline in purchase mortgage applications.

The average contract interest rate for one-year ARMs was unchanged. The rate was 7.20 percent with points decreasing to 0.22 from 0.24 (including the origination fee) for 80 percent loan-to-value loans. Clearly not a good choice if you're taking out a mortgage today.

With the Purchase Index numbers so dismal we can expect disappointing sales reports for the month of July unless we see a significant increase during the last two weeks of July, which would be a miracle. These numbers clearly show the housing market is not ready to stand on its own two feet and momentum could build for another tax credit bill.

News reports indicate there is pent-up demand, but we won't see a full recovery recovery until the job market rebounds, according to Harvard's Joint Center for Housing Studies. In its State of the Nation's Housing 2010 report, the center says it sees positive signs for the housing marketplace with low mortgage rates and affordable home prices, but there are still many risks including high foreclosure rates, tight lending standards, and weak job creation.
"The question is, can housing stand on its own two feet without the benefit of the tax credit?" asked Eric Belsky, the center's executive director. "Conditions are not particularly ripe for a turnaround, especially with the low level of job growth we've seen. The key to the strength of the housing recovery is job growth."

So jobs remain the answer to a a full housing recovery, yet there's little sign of job growth on the horizon, which likely means the housing market will remain flat as well.

Lita Epstein has written more than 25 books including "The 250 Questions Everyone Should Ask About Buying Foreclosures."