The first weekly rise in mortgage application volumes since the end of August was discounted as an outlier by the Mortgage Bankers Association (MBA) on Wednesday amid stubborn demand pressures.

The MBA’s Market Composite Index, which tracks mortgage application volumes, recorded seasonally adjusted growth of 3.4% over the seven days ending Oct. 23. That reversed seven straight weeks of application declines as mortgage rates surged above 7% through September.

Average rates for typical 30-year home loans eased for the second consecutive week, falling to 7.37% from a recent peak of 7.5% earlier this month amid sustained cooling in long-term government borrowing costs.

Yields on 10-year U.S. Treasurys to which most mortgage rates are benchmarked have declined from two-decade highs above 5.3% earlier in October to slightly below 5% during the past week. But forecasts for 10-year yields remain elevated with the Federal Reserve expected to raise interest rates in the coming months to tackle rising inflation.

“Mortgage rates are still more than a percentage point higher than the same week last year and most homeowners still have rates much lower than prevailing market rates,” said Joel Kan, deputy chief economist of the MBA, setting expectations low for any more meaningful recovery in mortgage demand.

The MBA and Fannie Mae project borrowing costs will hover near current levels through next year, driving a sharp drop in single-family originations below $2 trillion. Mortgage rate lock-in effects and minimal refinance volumes are likely to continue limiting growth and profitability.

The association’s seasonally adjusted purchase index rose 4% over the week but fell 3% on an unadjusted basis, remaining 18% below year-ago levels. Refinance applications posted their first weekly gain since mid-August, increasing by 3% to account for about 39% of total volumes.

The share of applications for loans insured by the Federal Housing Administration rose slightly to 16.6% last week as average 30-year rates for FHA loans slid just one basis point to 7.12%. Application share for mortgages backed by the Department of Veterans Affairs dipped to 11% from 11.5% the previous week.

Adjustable-rate mortgages gained market share, increasing to 11.3% last week from 10.5% over the first half of the month. That continues a trend that began as mortgage rates started rising in earnest over the summer.