Mortgage demand edged lower for the fourth straight week, according to data released Wednesday, even though interest rates have fallen from their recent highs.

Total volume was down 1.8% last week from the previous week, according to the Mortgage Bankers Association’s seasonally adjusted index.

Applications for a loan to purchase a home fell 1% for the week but were 18% lower than the same week one year ago. More supply is coming onto the housing market, as competition cools among buyers. But prices and rates are still high, and inflation is weakening consumer confidence.

The average contract interest rate for 30-year fixed-rate mortgages with conforming loan balances ($647,200 or less) decreased to 5.74% from 5.82%, with points falling to 0.61 from 0.65 (including the origination fee) for loans with a 20% down payment.

“Increased economic uncertainty and prevalent affordability challenges are dissuading households from entering the market, leading to declining purchase activity that is close to lows last seen at the onset of the pandemic,” said Joel Kan, an economist at the Mortgage Bankers Association.

There could be “a potential silver lining” for the market, he added, as stabilizing mortgage rates and rising inventory “may bring some buyers back to the market during the second half of the year.”

Applications to refinance a home loan fell another 4% for the week and were 83% lower than the same week one year ago. The average rate on the 30-year fixed mortgage was 3.01% a year ago. Most borrowers have already refinanced to far lower rates than exist today. The refinance share of mortgage activity decreased to 30.7% of total applications from 31.4% the previous week.

All eyes and ears are now on the Federal Reserve, which is widely expected to increase its benchmark lending rate Wednesday at its latest meeting of the Federal Open Market Committee.

While mortgage rates do not follow the federal funds rate, they will respond to any commentary from Fed Chairman Jerome Powell after the meeting.