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Mortgage applications dropped 6.5% last week, and demand reached the lowest point in 22 years, the Mortgage Bankers Association reported Wednesday. The index reflects applications for refinancings and home purchases.

Mortgage applications for a home purchase, a gauge of homebuying, dropped 7% for the week and are now 21% lower than a year ago, the MBA reports. Refinance applications dropped another 6% this week and are 75% lower than the same week a year ago.

Rising mortgage rates have been chipping away at affordability. The average contract interest rate for a 30-year fixed-rate mortgage with a 20% down payment rose to 5.40% compared to 5.22% the previous week, the MBA reports.

Mortgage rates are still low by historical standards. But a year ago, the 30-year fixed-rate mortgage averaged below 3%. Home buyers are also facing higher home prices that are up by double-digit percentages annually.

“The purchase market has suffered from persistently low housing inventory and the jump in mortgage rates over the past two months,” says Joel Kan, an MBA economist. “These worsening affordability challenges have been particularly hard on prospective first-time buyers.”