Falling mortgage rates encouraged more people to take out home loans last week, though activity remained well below the pandemic-era homebuying frenzy.

An index measuring the volume of mortgage applications for purchase and refinancing rose 10.4% to its highest since July, the Mortgage Bankers Association said Wednesday. Not coincidentally, the average rate offered for a 30-year mortgage fell 13 basis points to 6.75%, its lowest in three weeks. Mortgage applications remained far less popular than during the pandemic era of ultra-low rates, as the chart below shows.

Mortgage rates are tied to yields on 10-year Treasurys, which are in turn influenced by market perceptions about the Federal Reserve’s key fed funds rate, as well as fears about inflation. Mortgage rates have been on a downward trend amid expectations among traders that the central bank will soon begin cutting the rate from its current 22-year high.

Despite the recent downtick, which has taken the average 30-year rate down from its recent peak of nearly 8% in late October, rates remain close to their highest in decades and have made homebuying all but unaffordable for most first-time purchasers. Many forecasters expect rates to fall as the year goes on, breathing some life back into the stagnant housing market.