(Reuters) – The number of applications for home mortgages decreased last week to the lowest level since early 2020, dampened by declines in refinancing activity and purchase applications.

The Mortgage Bankers Association (MBA) said on Wednesday its seasonally adjusted market index fell 1.8% in the week ending on July 2 from a week earlier, leaving it at to the lowest level since January 2020. This reflected a 2.3% decrease in applications to refinance existing loans and a 1.1% drop in applications to purchase a home.

The average contract interest rate for traditional 30-year mortgages decreased to 3.15% last week from 3.20% the prior week.

“The 30-year fixed rate was 11 basis points lower than the same week a year ago, but many borrowers previously refinanced at even lower rates,” Joel Kan, MBA’s associate vice president of economic and industry forecasting, said in a statement. “Refinance applications have trended lower than 2020 levels for the past four months.”

Rising home prices combined with insufficient supply has continued to weigh on the housing market.

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