U.S. home loan applications are the lowest in decades as evidence mounts that rising mortgage rates and home prices are shutting out many aspiring homeowners.

The Mortgage Bankers Association’s index of home loan applications shows home purchase loans fell 2.1% to a seasonally adjusted reading of 141.9. That’s the lowest level for the index since April 1995.

“Both purchase and refinance applications fell, with the purchase index hitting a 28-year low, as prospective buyers remain on the sidelines due to low housing inventory and elevated mortgage rates,” said Joel Kan, the MBA’s deputy chief economist. The average rate on the benchmark 30-year home loan has been hovering around 7% since February.

High rates can add hundreds of dollars a month in costs for borrowers, limiting how much they can afford in a market already unaffordable to many Americans. They also discourage homeowners who locked in low rates two years ago from selling, a trend that’s helped keep the inventory of previously occupied U.S. homes on the market at near-record lows.

The lack of housing supply has weighed on sales of previously occupied U.S. homes, which are down 22.3% through the first seven months of the year versus the same stretch in 2022.

The average rate on a 30-year mortgage remains more than double what it was two years ago, when it was just 2.87%. As more homeowners locked in bottom-barrel rates in recent years, demand for home loan refinancing has plunged.