(Reuters.) – The Federal Reserve’s efforts to ease the rate-sensitive housing sector continues to make an impact on the mortgage application volume.

MBA reported that its Market Composite Index (which incorporates purchase and refinance application) dropped 6.5% to 288.4 from 645.4 a year ago.

This was despite the fact that the average fixed rate contract rate for a 30-year mortgage on an adjustable-rate basis was still below its peak four weeks ago. Following three weeks’ declines, the average rate increased to 5.4% during the week that ended June 3, after rising by 3.4% over previous weeks.

The overall rate of mortgage interest has risen to the highest level in many decades, despite the fact that the central banks signaled they would take a more aggressive approach in curbing the demand for the economy to lower high inflation.

MBA reported that its Purchase Composite Index (a measure of mortgage applications to purchase a single-family home) fell by 7.1% in one week, while its Refinance Index dropped 5.6%.

We will see how fast the Fed can stop the double-digit increase in housing prices annually. Competition is intensified by the record-low housing stock, and tight labor market.