Mortgage demand rose slightly last week despite a steady march higher in borrowing costs, the Mortgage Bankers Association (MBA) said Wednesday.

The MBA’s Market Composite Index, a measure of mortgage loan application volumes, edged up 0.8% on a seasonally adjusted basis over the week ending Aug. 28, supported by a 2% increase in purchase applications from a week prior.

Purchase demand, however, remained lower than the same week a year ago for the fifth consecutive week, while the refinance index declined 1% over the week to land 19% lower year over year.

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“Mortgage rates reached their highest levels in four weeks as investors’ concerns about inflation and growing deficits push yields higher across the globe,” explained Mike Fratantoni, chief economist at the MBA, in commentary accompanying the weekly figures.

Average mortgage rates for 30-year fixed-rate loans were 6.79% last week, according to MBA data, just slightly above the prior week’s average of 6.78%.

Typical 30-year rates have been above 6.5% for 16 consecutive weeks after hovering around 6% in February. More disconcertingly, weekly average 30-year rates spent August about 10 basis points above year-ago levels, widening to 15 basis points last week.

“In many local markets, potential buyers have plenty of homes to choose, and this is likely supporting transaction volume,” added Fratantoni.

With higher inflation and volatility in bond markets unlikely to ease soon, experts caution that mortgage rates are poised to remain elevated for the foreseeable future, keeping pressure on lenders and loan originators competing for production.

Refinances accounted for slightly under 42% of overall application volumes last week, around recent levels.

The share of applications for loans insured by the Federal Housing Administration fell for a second consecutive week to 15.9% from above 17% earlier in August. Average mortgage rates for FHA loans rose last week to 6.49% from 6.46%.

Meanwhile, applications for government mortgages backed by the Department of Veterans Affairs climbed to a 13.6% share from 12.8% the previous week.