U.S. demand for home loans fell for a third straight week last week while prices for single-family homes retreated further in July as the housing market struggles for balance with less government support.

Loan applications to buy homes fell 3.3 percent, the Mortgage Bankers Association said on Wednesday. A second report showed the Federal Housing Finance Agency’s house price index dropped 0.5 percent after falling 1.2 percent in June.

The beleaguered housing market, the main catalyst of the worst recession since the 1930s, has hit a soft patch following the end of a popular homebuyer tax credit in April, posing a threat to the fragile economic recovery.

While much of the housing market weakness has been blamed on the expiration of the tax credit, analysts said stubbornly high unemployment was also sapping demand for homes.

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