Mortgage demand experienced a setback last week, with seasonally adjusted applications falling 10% from the prior period, according to the Mortgage Bankers Association (MBA). The decline in mortgage application volume follows three straight weeks of increased demand, including a 9.4% gain heading into the July Fourth holiday.

The MBA’s seasonally adjusted purchase index decreased 12% last week, while the association’s refinance index fell 7%.

Joel Kan, MBA’s vice president and deputy chief economist, noted in a press release that rising interest rates weighed on both purchase and refinance activity.

“Purchase applications remained sensitive to both the uncertain economic outlook and the volatility in rates and declined to the slowest pace since May,” Kan stated. “Refinance applications also dipped because of higher rates, with refinance applications falling, led by VA [Veterans Affairs] refinances partially reversing their previous week’s gain, dropping 22%.”

The average 30-year fixed-rate mortgage was 6.72% last week, according to Freddie Mac, gaining five basis points over a seven-day period ending July 10. The 15-year rate rose six basis points to 5.86%. Sam Khater, Freddie Mac’s chief economist, attributed the gains to a robust jobs report released by the Bureau of Labor Statistics on July 3, which lowered the chances that the Federal Reserve will cut interest rates later this month.

The MBA’s mortgage survey found that the refinance share of mortgage activity increased to 41.1% of total applications from 40% the week prior. The adjustable-rate mortgage (ARM) share of activity fell to 7.1% from 7.7%.

On the government lending side, the Federal Housing Administration share of total mortgage applications increased to 19% from 17.9% the previous week. The VA share fell to 12.6% from 13%, while the U.S. Department of Agriculture share saw a slight downtick to 0.5% from 0.6%.