Mortgage lending dropped to its lowest level in 14 years with the increase in interest rates believed to be a primary driver, but NewOak’s president doesn’t believe that.

Rates have spiked in reaction to the Federal Reserve’s indication that it will be pulling back on its bond buying program and that the market has seen the last of these historically low levels.

While the average 30-year fixed rate mortgage has increased about 90 basis points since last May, the rate still remains well below its historical average.

So is the bounce in interest rates the driver of the drop in mortgage lending?

James Frischling, president of NewOak, says that the answer is that rates explain part, but not the entire story.

“The bigger driver of the fall in mortgage lending can be attributed to the combination of weak borrowers, tighter credit standards and a sharp rise in prices.

The banks continue to be blamed for their role in the mortgage crisis, so conservatism on the part of most lenders continues to rule the day,” Frischling said. “Meanwhile, consumers are still recovering from the financial crisis and wage and job growth has been insufficient to dig them out of their holes. The incongruent environment of tighter credit standards by lenders and weakened borrowers doesn’t bode well for the housing market.”

For the past few years, the euphoria around the housing market was fueled by the refinancing of existing mortgages, not new mortgages, he said.

“The increase in interest rates put an end to the refinancing boom, but there was the expectation, or maybe the hope, that a second wave of buying would be powered by new borrowers,” Frischling said. “The importance of housing on the broader economy shouldn’t be understated. For this market to advance further, lenders small and large will need their credit standards to ease. With so many banks looking to put money to work, this may yet prove to be a buyers’ market—with some patience.”