Amid high demand and low supply, the ripple effect is making its way to the mortgage market, with home loan applications down 4 percent over the last week, even though they are 8 percent higher than the same period last year, according to a CNBC report.

One difference: The size of the typical purchase loan application today, according to Mike Fratantoni, chief economist for the Mortgage Bankers Association (MBA).

“We’re seeing indications that entry level buyers continue to come into the market as jumbo borrowers looking at bigger homes step back. Last week, the average loan size for home purchase dropped to its lowest level since January.”

The numbers may indicate buyers looking to move up are not willing to pay the increasing prices. Affordable also is softening. Amid an increase in demand for entry level properties, there are fewer starter-level homes for sale.

Today’s market still has a plethora of homeowners who could benefit from a mortgage refinance, but applications dropped 9 percent for the week and are down 35 percent compared to a year ago, when rates were slightly lower, according to the MBA. The refinance share of mortgage activity remained well below 50 percent, with the refinance share of mortgage activity accounted for 44.9 percent of all applications. Joel Kan, an MBA economist, pointed out that purchase applications increased last week and reached their highest level in two weeks as factors supporting housing in the U.S. remained healthy.

“The 30-year fixed mortgage rate increased to its highest level since May 2017, following a jump in the U.S. 10-year Treasury, which was driven mainly by news that European economies have strengthened and the [European Central Bank] may be poised to tighten its accommodative policies. Refinance applications fell slightly in response and the refi index remained close to its 2017 year-to-date average.”

The CNBC report also noted that the average contract interest rate for 30-year fixed-rate mortgages with conforming loan balances of $424,100 or less remained unchanged at 4.13 percent. Points have dropped from 0.34 to 0.32, including the origination fee, for 80 percent loan-to-value ratio loans. While rates may be on the move, Brett Sinnott, vice president of capital markets at CMG Financial, is one who expects rates to hold steady.

“Fortunately for the housing market, political stories continue to dominate the news, which has allowed rates to remain fairly stable to start the summer. It is still expected that the Fed will increase rates at least once more this year. So far, the moves have had little effect on mortgages.”