Mortgage rates fell gradually this week, mortgage buyer Freddie Mac said Thursday.

Freddie Mac’s latest prime mortgage market survey, released Thursday, showed the benchmark average rate. 30-year fixed mortgage it fell to 6.09% from last week’s reading of 6.11%.

The average rate for a 30-year loan was 6.87% a year ago.

The average 30-year fixed mortgage rate fell to 6.09% this week, Freddie Mac said. (Ty Wright/Bloomberg via Getty Images)

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“Boosted by strong economic growth, a strong labor market and mortgage rates at three-year lows, housing affordability continues to improve measurably,” said Sam Khater, chief economist at Freddie Mac. “These factors have attracted the attention of many potential home buyers, driving purchase application activity higher than a year ago.”

The average rate a 15-year fixed mortgage fell to 5.44% from 5.5% last week.

Mortgage rates are affected by a number of factors, including the Federal Reserve and geopolitics. While mortgage rates are not directly affected by the Fed’s interest rate decisions, they closely track the 10-year Treasury yield. The 10-year yield was around 4.1% as of Thursday afternoon.

“Mortgage rates have remained in the low 6% range for weeks, allowing buyers and sellers who were already ready to take action, but probably not low enough to attract the next wave,” said Realtor.com economist Jiayi Xu. “While active listings continued to increase year over year in January, inventory growth slowed for the ninth consecutive month, leaving total supply still 17.2% below pre-pandemic levels.”

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“In short, while the market It remains stable, a further drop in rates will be needed to attract new buyers and sellers and really revive the housing market,” Xu added.

The average 15-year mortgage rate fell to 5.44% this week. (David Paul Morris/Bloomberg via Getty Images)

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Sales of existing homes in the U.S. fell to the lowest level in more than two years in January as falling inventories pushed up home prices.

Home sales fell 8.4 percent last month to a seasonally adjusted annual rate of 3.91 million units, the lowest level since December 2023, the National Association of Realtors said Thursday. Economists polled by Reuters had forecast home resales would decline at a rate of 4.18 million units.

Last month’s sales likely reflect contracts that were signed in November and December and would not have been affected winter storms which hit much of the country in January. Home sales decreased by 4.4% year-on-year.

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Reuters contributed to this report.