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“You would think people would be literally lined up around the bank,” said Steve Adams, a mortgage loan officer with Stock Yards Bank.

But falling rates aren’t motivating buyers — only those who want to refinance their existing loans, he said.

High unemployment rates leave many would-be buyers unable to take advantage of the low rates. The unemployment rate is 9.1 percent nationally and 9.5 percent in the Louisville-Southern Indiana metro area. Few Americans are getting raises, and many are struggling to shrink their debt loads.

“It isn’t the mortgage rate that matters,” said Joel Naroff, head of Naroff Economic Advisors. Naroff blamed the “horrendous” process of qualifying for a mortgage.

With so many properties on the Louisville market, buyers have “the pick of the litter,” said Michael Higdon, an agent with RE/MAX Properties East in Plainview. Sellers have difficulty accepting that their homes might not be worth what they hoped, or even what they paid for them a few years ago, he said.

It’s not uncommon for a house that fetched $150,000 in 2006 to go for $125,000 or less today, said Higdon, who has been in the business since 2003.

“(Sellers) are saying, ‘Well, can we start high and come down later?’ ” he said. “What we find is, most buyers won’t even bother with looking at a property they feel is overpriced.”

Louisville Realtors were able to squeeze out a sales gain in July in part because sales were so low in July 2010. At that time, the federal homebuyer tax credits worth up to $8,000 had just expired. In fact, it was the slowest July since at least 2001, according to Louisville Realtors statistics.

Agents like Breland have acknowledged that the stimulus effort caused buyers to speed up their plans, leading to a dearth of demand later when the credits expired.

Despite the depressed market, National Association of Realtors spokesman Walter Molony said no one is calling for additional tax credits or other government stimulus.

“We believe the housing market needs to heal on its own, but that buyers are being held back largely by tight credit,” he said.