Although mortgage rates fell for a second successive week, it wasn’t enough to prompt more demand from potential buyers.

The Mortgage Bankers Association reported that mortgage rates fell 10 basis points last week and are now down 24 points over the past two weeks. However, demand for mortgages fell 5.4% last week.

The MBA said the average contract interest rate for a 30-year fixed-rate mortgage with a conforming loan balance of $647,200 or less fell from 5.84% to 5.74% last week.

Joel Kan, the MBA’s associate vice president of economic and industry forecasting, said rates fell amid “growing concerns over an economic slowdown and increased recessionary risks” that kept Treasury yields lower.

However, those hoping for a rebound in the housing market were left disappointed, as the MBA said those concerns showed up in refinance applications, which fell 8% from the previous week. Refinance applications are down 78% from a year ago. Meanwhile, the share of refinancing in total mortgage activity fell to just 29.6%, down from 30.3% a week ago.

Applications for home purchase mortgages also fell by 4% in the week, and 17% from a year ago, the MBA said.

The problem, said Kan, is that rates are still “significantly higher than they were a year ago.” Added to that, purchase activity is being hamstrung by “ongoing affordability challenges and low inventory,” he said.

Last week, realtor.com published its June Housing Report, showing that for-sale home inventories are recovering, rising at the fastest pace since it first began recording such data. Home inventory grew by 18.7% from a year ago. However, there were still 53% fewer homes on the market than there were in June 2019.

Realtor.com Chief Economist Danielle Hale said inventory recovery has accelerated and that these improvements are expected to continue. However, she warned that “the typical buyer has yet to see meaningful relief from quickly selling homes and record-high asking prices.”

The MBA said the average home purchase loan was $405,200 last week, down from $413,500 in the last week of June, but still up 21% from a year earlier.