Mortgage rates blew past year-ago levels last week, driving annual declines in purchase and refinance application activity, the Mortgage Bankers Association (MBA) said Wednesday.

The MBA’s Market Composite Index, a measure of mortgage loan application volume, declined 2.9% on a seasonally adjusted basis over the week ending July 31, deepening the previous week’s more than 6% decline in application volumes.

Refinance activity was 9% lower than a year ago and down 2% over the week. Purchase application volumes ended July down 3% year over year and were 4% lower from the prior week.

A spike in yields on longer-dated U.S. Treasury debt following last week’s decision by the Federal Open Market Committee (FOMC) to keep benchmark interest rates unchanged resulted in the fifth straight week of rising mortgage borrowing costs.

Contract interest rates for 30-year fixed-rate mortgages averaged 6.81% last week compared to 6.77% over the same week a year ago, according to MBA data. Rates hovered around 6.6% through late May and most of June.

“In the wake of the July FOMC meeting, longer-term rates increased, with mortgage rates reaching their highest level in more than a year,” said Mike Fratantoni, chief economist at the MBA, in a statement accompanying the trade group’s weekly figures.

Kevin Warsh’s refusal to explain the central bank’s decision at the post-FOMC press conference drove the jump in yields, with investors balking at the Federal Reserve chairman’s efforts to limit communication on Fed policy positions and its economic outlook.

Scotsman Guide reported in early July that higher mortgage rates were on the horizon due directly to Warsh’s reform agenda, as well as stabilizing employment trends and a series of compounding inflationary pressures.

Mortgage rates for 30-year loans have now spent 12 consecutive weeks over 6.5% after spending the first two months of the year around 6%, having surged since the start of the Iran war in late February.

The decline in purchase applications last week fueled a slight uptick in the refinance share of total applications, which edged up to almost 40% from 39.5% the previous week.

Across government programs, the share of applications for loans insured by the Federal Housing Administration (FHA) rose to 17.3% from 16.9% the prior week, the MBA reported Wednesday, while applications for loans backed by the Department of Veterans Affairs fell to 12.3% of all activity.

The average mortgage rate for 30-year fixed-rate loans backed by the FHA increased to 6.43% from 6.41% the previous week.