Mortgage rates turned lower for the second straight week, but it wasn’t enough to boost demand for either new purchase loans or refinances, according to a weekly report from the Mortgage Bankers Association.

Rates are still much higher than they were for the past two years. Last week the average contract interest rate for 30-year fixed-rate mortgages with conforming loan balances ($647,200 or less) decreased to 5.46% from 5.49%, with points dropping to 0.60 from 0.74 (including the origination fee) for loans with a 20% down payment.

Applications to refinance a home loan dropped 2% for the week and were 75% lower than the same week one year ago.

“Most refinance borrowers continue to remain on the sidelines as a result, and refinance applications have fallen in nine of the past 10 weeks. Compared to January 2022, refinance activity is down 66%,” said Joel Kan, MBA’s associate vice president of economic and industry forecasting.

Homebuyers are also pulling back. Applications for a mortgage to purchase a home were flat week to week and down 16% from a year ago.

More supply is coming on the market, but homes are suddenly sitting longer for sale.

Mortgage demand from homebuyers is now close to the lows last seen in spring 2020, at the start of the Covid pandemic. Homebuying quickly picked up after that, and frenzied demand pushed prices higher at an astounding rate over the past two years.

Now those high prices are sidelining potential buyers, especially people seeking to purchase their first home.