The average rate on a 30-year U.S. mortgage held steady this week at its lowest level in nearly 10 months, an encouraging sign for prospective homebuyers who have been held back by stubbornly high home financing costs.

The long-term rate was unchanged from last week at 6.58%, mortgage buyer Freddie Mac said Thursday. A year ago, the rate averaged 6.46%.

Borrowing costs on 15-year fixed-rate mortgages, popular with homeowners refinancing their home loans, edged lower. The average rate dropped to 5.69% from 5.71% last week. A year ago, it was 5.62%, Freddie Mac said.

Stubbornly high 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 and have remained sluggish this year.

For much of the year, the average rate on a 30-year mortgage has hovered relatively close to its 2025 high of just above 7%, set in mid-January. Since last week, the average rate has been at its lowest level since Oct. 24, when it averaged 6.54%.

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.

The main barometer is the 10-year Treasury yield, which lenders use as a guide to pricing home loans. The yield was at 4.34% at midday Thursday, up from 4.29% late Wednesday.

The yield has been mostly rising this month as bond traders weighed how data on inflation and the job market, and the potential economic impact of Trump administration’s tariffs, may influence the Fed’s interest rate policy moves.

The central bank has so far been hesitant to cut interest rates out of fear that Trump’s tariffs could push inflation higher, but data showing hiring slowed last month have 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, which could push bond yields higher, driving mortgage rates upward in turn.

“Even if the Fed cuts the short-term federal funds rate in September, which is largely expected, it is not likely that we will see a big drop in mortgage rates,” said Lisa Sturtevant, chief economist at Bright MLS.

Economists generally expect the average rate on a 30-year mortgage to remain near the mid-6% range this year.

That may not be low enough to spur a meaningful increase in home sales.

While the housing market slowdown is forcing many sellers to lower their asking price and even pay for a buyer’s closing costs, among other incentives, 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 remains near the all-time high of $435,300 set in June. And while prices are down from a year ago in many metro areas in the South and West such as Miami, Denver and Austin, they haven’t come down nearly enough to offset years of soaring prices.

“Lower mortgage rates and slower price growth — or even year-over-year price declines — is going to be necessary to improve affordability and bring more homebuyers into the market,” Sturtevant said.

This story was originally featured on Fortune.com

© Getty Images

Sales of previously occupied U.S. homes rose in July as homebuyers were encouraged by a modest pullback in mortgage rates, slowing home price growth and the most properties on the market in over five years.

Existing home sales rose 2% last month from June to a seasonally adjusted annual rate of 4.01 million units, the National Association of Realtors said Thursday.

Sales edged up 0.8% compared with July last year. The latest sales figure topped the 3.92 million pace economists were expecting, according to FactSet.

Home prices rose on an annual basis for the 25th consecutive month, although the rate of growth continued to slow. The national median sales price inched up just 0.2% in July from a year earlier to $422,400.

That was the smallest annual increase since June 2023. Even so, the median home sales price last month is the highest for any previous July, based on data going back to 1999.

“The ever-so-slight improvement in housing affordability is inching up home sales,” said Lawrence Yun, NAR’s chief economist. “Wage growth is now comfortably outpacing home price growth, and buyers have more choices.”

The U.S. housing market has been in a sales slump since 2022, when mortgage rates began climbing from historic lows. Sales of previously occupied U.S. homes sank last year to their lowest level in nearly 30 years.

This year’s spring homebuying season, which is traditionally the busiest period of the year for the housing market, was a bust as stubbornly high mortgage rates put off many prospective homebuyers. Affordability remains a dauting challenge for most aspiring homeowners following years of skyrocketing home prices.

First-time homebuyers, who don’t have home equity gains to put toward a new home purchase, accounted for 28% of homes sales last month, down from 30% in June, NAR said. Historically, they made up 40% of home sales.

The average rate on a 30-year mortgage has remained elevated this year, although it has been at a nearly 10-month low of 6.58% the last two weeks.

Homes purchased last month likely went under contract in May and June, when the average rate ranged from 6.76% to 6.89%. Mortgage rates eased in July, dropping briefly to 6.67%.

As home sales have slowed, the number of unsold homes on the market has been rising.

There were 1.55 million unsold homes at the end of last month, up 0.6% from June and 15.7% from July last year, NAR said. That’s the most homes on the market since May 2020, early on in the COVID-19 pandemic.

Still, the inventory remains well below the roughly 2 million homes for sale that was typical before the pandemic.

July’s month-end inventory translates to a 4.6-month supply at the current sales pace, down from a 4.7-month supply at the end of June and up from 4 months in July last year. Traditionally, a 5- to 6-month supply is considered a balanced market between buyers and sellers.

Homes are also taking longer to sell. Properties typically remained on the market for 28 days last month before selling, up from 24 days in July last year, NAR said.

Home shoppers who can afford to buy at current mortgage rates or pay in cash are likely to benefit from the slower growth in prices and increased supply of properties on the market.

It’s not uncommon now for sellers, especially those in Southern and Western markets, to lower their asking price and offer incentives such as money for closing costs or repairs in order to sweeten the deal, real estate agents say.

In July, some 20.6% of homes listed for sale had their price reduced, according to Realtor.com. That’s down slightly from June.

“One can say that things are a little better today as a buyer, compared to say just a couple of years ago,” Yun said.

This story was originally featured on Fortune.com

© Getty Images