The average 30-year mortgage rate reached 7.09%, the second-highest since 2001, following a U.S. government debt downgrade.

The mortgage applications index declined by 3.1% to 194.5, a six-month low.

The Federal Reserve’s aggressive interest rate hikes may be impeding home price cooling, but increased mortgage rates and reduced demand may be beneficial for shelter prices and the U.S. central bank’s inflation fight.