As interest rates rise, the demand for mortgages seems to have nowhere to go but down.

According to the seasonally adjusted indicator from the Mortgage Bankers Association, the number of applications declined 1.2% last week compared to the week before. The outcomes for the week have been modified to account for Labor Day. Mortgage demand from homebuyers has decreased by almost a third since last year.

Mortgage rates increased once more after Federal Reserve Chairman Jerome Powell made it clear to investors that the central bank will continue to be tough on inflation, even if it hurt consumers. They had been gradually declining throughout July and August.

The average contract interest rate for 30-year fixed-rate mortgages with conforming loan balances—$647,200 or less—rose from 5.94% to 6.01%, with points for loans with a 20% down payment falling from 0.79 to 0.76 (including the origination fee).

According to Joel Kan, MBA’s associate vice president of economic and industry forecasts, the 30-year fixed mortgage rate “reached the 6% threshold for the first time since 2008” (increasing to 6.01%), which is essentially double what it was in the previous year.

The demand for refinances dropped by another 4% for the week, and it was 83% lower than it had been the previous week. Only around 452,000 borrowers may benefit from a refinance at rates above 6%, according to Black Knight, a provider of mortgage technology and data. The lowest number ever recorded is that one. Only a small number of the remaining applicants might save more than $315 per borrower each month.

Mortgage applications for home purchases increased by 0.2% from the previous week but were 29% lower than they were during the same week a year earlier. Demand for Veterans Affairs and USDA loans, which first-time buyers prefer because they can give little or no down payments, increased.

“Last week, at 118 and 45 basis points, respectively, the difference between the conforming 30-year fixed mortgage rate and both ARM and jumbo loans remained substantial. The large spread highlights the turbulence in the capital markets brought on by the unknown nature of the Fed’s upcoming policy decisions, Kan continued.

This week, mortgage rates considerably increased as a result of an unexpectedly high monthly inflation rate. Investors were concerned that the Federal Reserve might raise rates more than anticipated at its next meeting as a result of this.

According to Matthew Graham, chief operating officer of Mortgage News Daily, “it was one of the last shoes to drop before the Fed announcement on September 21st, and it arrived at a time when the market had fully priced in a 75bp hike, but was willing to consider something even higher if the data was convincing.” It may be said that this convinced the Fed to at least start a discussion.