Applications for mortgages hit their lowest since the beginning of 2020.

The erratic economic impact of the COVID-19 pandemic caused rippling damage to the personal finances of many Americans. As a result of income lost from lost or diminished employment, applications for various kinds of financial assistance and loans increased notably during 2020 and into 2021. This includes applications for mortgages, as people in need of large sums of money were willing to put their houses up if it meant keeping their books balanced in the short term. However, as US citizens return to work and the economy slowly, but surely stabilizes, applications for mortgages are on the downturn.

According to the latest statistics from the Mortgage Bankers Association, new applications for mortgages in the US fell by 1.8% last week, setting them back to lows not seen since the beginning of 2020. Refinancing applications dropped by 2%, and are now 8% lower than they were this time last year.

“Swift home-price growth across much of the country, driven by insufficient housing supply, is weighing on the purchase market and is pushing average loan amounts higher,” said Joel Kan, associate vice president of economic and industry forecasting at the MBA.

As desires for mortgages drop, mortgage rates are falling in tandem, though this doesn’t seem to be spurring any increased interest in applying. The average interest rate for a 30-year fixed-rate mortgage contract dropped by 5 basis points to 3.15.

MBA: Mortgage Applications Decrease in Latest Weekly Survey https://t.co/JfuBYbDLk1 pic.twitter.com/MoVor3kuc0

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“Treasury yields have been volatile despite mostly positive economic news, including last week’s June jobs report, which showed ongoing improvements in the labor market. However, rates continued to move lower – especially late in the week,” Kan said. “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.”