The tepid growth in the job market and in the economy as a whole seems to be reflected in the mortgage lending space.

The widely followed measure of mortgage applications for home purchases put out by the Mortgage Bankers Association has shown tentative signs of improvement over the past six months, but research firm Capital Economics notes that it is still well below the levels seen in mid-2013.

“And the bigger picture is that it has done little but move sideways over the past five years. With the Fed set to begin raising interest rates later this year, there must be a risk that confidence among homebuyers will prove fragile, thus delaying further a meaningful upturn,” writes Paul Stansfield, chief property economist for Capital Economics, in a client note.

Wage growth and economic growth combined have brought secular stagnation, says Anthony Sanders, distinguished professor of finance at George Mason University.

Sanders will be one of the featured panelist on the “Economic and Policy Forum: State of the U.S. Housing Market” forum scheduled for Tuesday in Washington, D.C. starting at 9:30 a.m. E.T.

The National Association of Realtors is partnering with the National Association of Home Builders and the McGraw Hill Financial Global Institute to host the forums, which will also include panels featuring economists Robert Shiller, David Crowe from NAHB and Lawrence Yun from NAR, among others.

“…(D)espite the massive expansion of The Federal Reserve’s balance sheet, average wage growth is low and real median household income is still below 2007 levels,” Sanders says. “I am sure someone will mention ‘credit is too tight’ for which I will respond ‘No, it isn’t.’”

Stansfield points to other indicators that paint a rather less downbeat picture, suggesting that an upturn might just be underway.

“At first glance, the mortgage market data do not look good. Even with mortgage interest rates close to record lows, applications for home purchase seem to have made no contribution whatsoever to the housing recovery” Stansfield says. “While total home sales are 45% higher than their low point in mid-2010, mortgage applications are up just 3.9% over the same period. Indeed, the gap between home sales and mortgage applications in recent years has been unprecedented.”

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(Source: Capital Economic)

What’s more, he says, the subdued number of mortgages actually being originated suggests that the market could be even weaker than the applications data imply.

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(Source: Capital Economic)

However, other indicators suggest there are some grounds for optimism.

“Firstly, credit conditions are gradually loosening. The two most recent readings from the Fed’s Senior Loan Officer Survey showed that more mortgage lenders are loosening credit standards now than at any time in the past 20 years,” Stansfield says.

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(Source: Capital Economic)

“Secondly, despite the volume of mortgage applications remaining subdued, the total value of outstanding mortgage loans has risen steadily since early-2014. At 2%, growth over the past year has been modest, but it is a sharp turnaround from the 3% fall in the previous 12 months. Consistent with that, net mortgage lending flows have risen in four of the past five quarters, and by a total of $370 billion last year. This is the biggest expansion in lending since before the credit crunch.”

But a rising stock of outstanding loans doesn’t necessarily mean that the mortgage market is recovering. The apparent disconnect between the total value and volume of home purchase loans could reflect a tendency for banks to restrict lending to only the most credit-worthy, who will tend to buy the most expensive homes.

“So, has the mortgage market finally turned a corner? We would like to think so. After all, the rest of the housing market continues to improve. Home sales have rebounded after the weather- related weakness at the start of the year, reaching a seven-year high in February. What’s more, house prices are growing at a steady annual pace of just below 5% and, in line with our view that employment and income growth will stay strong, we expect price growth to accelerate to around 6.5% this year,” Stansfield says.

But Sanders is not convinced.

“While some speakers will undoubtedly tout the major recovery for the remainder of 2015 after the abysmal Q1 GDP, according to The Atlanta Fed’s GDP NOW real-time tracker, the long-term prognosis is weak, according to The Fed’s potential real GDP growth,” Sanders says. “This is secular stagnation, folks. Real GDP and wage growth are expected to be laconic going forward. On the other hand, there are economists who are forecasting a significant recovery.

“And with cash sales making up 39% of all home sales in January 2015, there just isn’t a recovery for the middle-class,” Sanders says.