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Home contract signings were at a more-than two-decade low in July as mortgage rates remained high, supply stayed lean, and many house hunters appeared to have simply lost hope.

The National Association of Realtors’ Pending Home Sales Index, which tracks contract signings, was down 5.5% last month compared to June, with declines in all four regions of the country. Compared to July 2023, only the Northeast region saw higher activity. The index was at its lowest point since NAR began tracking the data in 2001.

The housing market has been all but frozen in the past few years thanks to a surge in mortgage rates. In July, the 30-year fixed-rate mortgage averaged about 6.84%, according to Freddie Mac.

But a whopping 86% of American homeowners have a mortgage rate below 6%, real estate brokerage Redfin said Tuesday. That makes it hard for many homeowners to justify listing their homes for sale unless they absolutely have to, a phenomenon many call “rate lock-in.”

Meanwhile, homes that sold in July had a median price of $422,600, one of the highest readings on record, NAR said earlier in August.

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Stephen Freudenberg, a real estate agent in Atlanta, says the housing market has been so tight that many of his clients have stopped trying to buy. “They’re kind of burned out,” he told USA TODAY. “I think everyone’s just tired of the seller’s market cycle. It’s been going on a long time.”

The pace of sales was so sluggish in July that supply – which is calculated as a rate of homes available to buy divided by the number of sales – perked up to its best level since the beginning of the pandemic in May 2020.

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Many housing market observers have their hopes pinned on a decline in mortgage rates in line with the interest rate cut that the Federal Reserve seems likely to deliver in September.

That includes NAR’s chief economist, Lawrence Yun, who said in a release, “Current lower, falling mortgage rates will no doubt bring buyers into market.”

On Thursday, Freddie Mac said the 30-year fixed-rate mortgage averaged 6.35% in the week ending August 29, the lowest in nearly 18 months.