Home prices are cooling off and mortgage rates fell last week, but the fallout from recent bank closures could continue to make it hard for some Americans to buy homes, economists say.

Mortgage rates fell to 6.32% for a 30-year fixed rate mortgage, Freddie Mac data released on Thursday shows. Last fall, the 30-year fixed rate mortgage climbed to 7.08% — the first time in 20 years that rates rose above 7%.

Lower mortgage rates appear to have given home sales a boost in January and February, due to “pent-up buyer demand,” said Selma Hepp, chief economist at CoreLogic, which provides property, financial, and business intelligence.

Last week, the CoreLogic S&P Case-Shiller Index showed a 3.8% year-over-year rise in home prices in January falling from a 5.6% bump in December. There have been nine straight months of slowing annual home price growth and this is the lowest annual increase since before the winter of 2019, according to Hepp’s analysis.

But regional banks, which saw depositors leave for bigger banks after the collapse of Silicon Valley Bank last month, are now tightening credit. The result, according to a report from Fannie Mae, could be fewer residential construction loans and jumbo mortgages as many originate from small and mid-sized banks. Less supply will keep prices high and all of that will likely affect spring home-buying, Hepp said.

“If we had more inventory, we wouldn’t have the rate of appreciation that we had during the pandemic and, and the rate wouldn’t impact people to the extent that it does because home prices wouldn’t be as high,” she said.

Hepp is also watching the Federal Reserve’s action on interest rates. Many economists believe the Fed could stop raising rates after one more cycle. That would be good for mortgage rates but not every buyer will benefit, Hepp said.

“There’s two sides of this coin,” she said. “One is that we may see a more favorable mortgage rate during the spring home-buying season and into summer, but on the flip side, there may be some concern around the lack of mortgage lending,” Hepp said. “The mortgage lending that does end up occurring would be to very prime borrowers that have very strong credit, large down payments, and things like that.”

Lawrence Yun, chief economist at the National Association of Realtors, said he is concerned about how commercial lending would be affected by the banking crisis. Commercial real estate has already been affected by the pandemic and continuing remote work.

“Where someone wants to buy an office space or someone has a restaurant and they need to refinance their building, all this commercial real estate will come under stress just because it will be much more difficult to obtain those loans and community banks are trying to conserve as much cash as possible, not lend that out,” he said.

But that doesn’t mean that commercial real estate couldn’t end up affecting home-buying all the same, Yun added.

“Weakness in commercial real estate could hinder job growth. Job creation indirectly impacts home-buying in a sense that there is a [lesser] job creation, and that means it’s creating fewer potential home-buyers down the line,” he said.

Hepp said that the Fed may not be particularly concerned with the housing market right now, since it is rebalancing, with the possibility of “maybe over-shooting on a downside.” But credit availability will likely remain a concern, and there are things the Fed could do to address it.

“To whatever extent that there is liquidity in the market or there may not end up being liquidity in the market, I think that’s the point at which the Federal Reserve may end up utilizing some of the tools that they did at the onset of the pandemic,” she said. “In particular, I’m thinking about mortgage-backed securities.”

At the beginning of the pandemic, the Federal Reserve made large purchases of mortgage-backed securities and took several other steps to keep the flow of credit going. Any policies that would improve the inventory and affordability of housing would also be helpful to the housing market right now, she said.