The average rate for a 30-year U.S. mortgage edged higher for the third week in a row, though it remains close to its low point in 2025.

The average long-term mortgage rate ticked up to 6.26 percent last week from 6.24 percent the week before, mortgage buyer Freddie Mac stated. A year ago, the rate averaged 6.84 percent.

Four weeks ago, the average rate was at 6.17 percent — the lowest level in more than a year.

Borrowing costs for 15-year fixed-rate mortgages, popular with homeowners refinancing their home loans, also inched up last week. The rate averaged 5.54 percent, up from 5.49 percent the week before. A year ago, it was 6.02 percent, according to Freddie Mac.

When mortgage rates rise, they reduce homebuyers‘ purchasing power. The average rate for a 30-year mortgage has been stuck above 6 percent since September 2022, the year mortgage rates began climbing from historic lows.

That’s helped kept sales of previously occupied U.S. homes stuck at around a 4 million annual pace going back to 2023. Historically, sales have typically hovered around 5.2 million a year.

While sales have been sluggish this year, they received a boost this fall as mortgage rates eased. The average rate for a 30-year home loan has stayed below 6.4 percent since early September. Last month, home sales accelerated to their fastest pace since February.

Mortgage rates are influenced by several factors, from the Federal Reserve‘s interest rate policy decisions to bond market investors’ expectations for the economy and inflation. They generally follow the trajectory of the 10-year Treasury yield, which lenders use as a guide for pricing home loans.

The 10-year yield was at 4.10 percent at midday on Nov. 20. That’s down slightly from two weeks ago, but up from around 3.95 percent on Oct. 22.

Mortgage rates began declining this past summer ahead of the Federal Reserve’s decision in September to cut its main interest rate for the first time in a year amid signs the labor market was slowing. The Fed lowered its key interest rate again last month, although Fed Chair Jerome Powell cautioned that further rate cuts weren’t guaranteed.

Wall Street traders have reduced their bets that the Fed will cut its main interest rate at its next meeting in December, now giving it a roughly 44 percent probability, according to data from CME Group. That’s down from nearly 70 percent a few weeks ago, but better than the 30 percent chance before the release of the delayed September jobs report.

The central bank doesn’t set mortgage rates, and even when it cuts its short-term rates that doesn’t necessarily mean rates on home loans will necessarily decline.

Last fall, after the Fed cut its rate for the first time in more than four years, mortgage rates marched higher, eventually reaching just above 7 percent in January this year. At that time, the 10-year Treasury yield was climbing toward 5 percent.

Recent forecasts by economists at the National Association of Realtors and First American call for the average rate for a 30-year mortgage to drop to around 6 percent next year.

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The average rate for a 30-year U.S. mortgage has fallen to its lowest level in nearly 10 months, giving prospective homebuyers a sorely needed boost in purchasing power that could help inject life into a stagnant housing market.

The long-term rate dropped from 6.63 percent to 6.58 percent last week, mortgage buyer Freddie Mac said Thursday. A year ago, the rate averaged 6.49 percent.

Borrowing costs for 15-year fixed-rate mortgages, popular with homeowners refinancing their home loans, also fell. The average rate dropped from 5.75 percent to 5.71 percent last week. A year ago, it was 5.66 percent, Freddie Mac said.

Elevated mortgage rates have helped keep the U.S. housing market in a sales slump since early 2022, when rates started to climb from the rock-bottom lows they reached during the pandemic. Home sales sank last year to their lowest level in nearly 30 years.

This is the fourth week in a row that rates have come down. The average rate for a 30-year mortgage is now at its lowest level since Oct. 24, when it averaged 6.54 percent.

Mortgage rates are influenced by several factors, such as the Federal Reserve‘s interest rate policy decisions and bond market investors’ expectations for the economy and inflation.

The main barometer is the 10-year Treasury yield, which lenders use as a guide to price home loans. The yield was at 4.29 percent at midday on Thursday, up slightly from 4.24 percent late Wednesday.

The yield has come down the last couple of weeks after weaker-than-expected July U.S. job market data fueled speculation that the Fed will cut its main short-term interest rate next month.

A Fed rate cut could give the job market and overall economy a boost, but it could also fuel inflation just as President Trump’s tariff policies risk raising prices for U.S. consumers.

Meanwhile, a new inflation report Thursday showed prices at the U.S. wholesale level jumped 3.3 percent last month from a year earlier. That was well above the 2.5 percent rate that economists had forecast, and it could hint at higher inflation ahead.

Earlier this week, the Labor Department said consumer prices in July, though unchanged from June, rose 2.7 percent from a year earlier.

Higher inflation could push bond yields higher, driving mortgage rates upward in turn, even if the Fed cuts its key rate.

Economists generally expect the average rate for a 30-year mortgage to remain above 6 percent this year. Recent forecasts by Realtor.com and Fannie Mae project the average rate will ease to around 6.4 percent by the end of this year.

That may not be low enough to make a difference. While trends like declining home listing prices and more properties on the market in the Sunbelt and West now favor buyers, affordability remains a major hurdle for many aspiring homeowners.

Home price growth has slowed nationally, but the median sales price of a previously occupied U.S. home still climbed to an all-time high of $435,300 in June.

“Homebuyers who have been relegated to the sidelines by high financing costs got some encouragement in the past two weeks, but it remains to be seen if it’s enough to get more of them back in the game,” said Joel Berner, senior economist at Realtor.com.

The recent drop in mortgage rates has spurred many homeowners to refinance, however.

Mortgage applications jumped 10.9 percent last week from the previous week as rates eased, boosted by homeowners seeking to refinance, according to the Mortgage Bankers Association.

Home loan refinance applications made up nearly 47 percent of all mortgage applications. Refi loan applications jumped 23 percent from a week earlier – the strongest showing since April.

Meanwhile, applications for adjustable-rate mortgages, or ARMs, soared 25 percent to their highest level since 2022, MBA said.

Many homeowners aren’t waiting for rates to ease further before refinancing. Cash-out home refinancing activity surged to a nearly three-year high in the April-June quarter, as homeowners tapped some of the equity gains built up after years of soaring home prices.

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