The average rate on a 30-year mortgage dipped this week to just below 7% for the first time since mid April, a modest boost for home shoppers navigating a housing market dampened by rising prices and relatively few available properties.

The rate fell to 6.94% from 7.02% last week, mortgage buyer Freddie Mac said Thursday. A year ago, the rate averaged 6.57%.

This is the third straight weekly decline in the average rate. The recent pullbacks follow a five-week string of increases that pushed the average rate to its highest level since November 30. Higher mortgage rates can add hundreds of dollars a month in costs for borrowers, limiting homebuyers’ purchasing options.

Borrowing costs on 15-year fixed-rate mortgages, popular with homeowners refinancing their home loans, also declined this week, trimming the average rate to 6.24% from 6.28% last week. A year ago, it averaged 5.97%, Freddie Mac said.

Mortgage rates are influenced by several factors, including how the bond market reacts to the Federal Reserve’s interest rate policy and the moves in the 10-year Treasury yield, which lenders use as a guide to pricing home loans.

Treasury yields have largely been easing since Federal Reserve Chair Jerome Powell said earlier this month that the central bank remains closer to cutting its main interest rate than hiking it.

Still, the Fed has maintained it doesn’t plan to cut interest rates until it has greater confidence that price increases are slowing sustainably to its 2% target.

Until then, mortgage rates are unlikely to ease significantly, economists say.

After climbing to a 23-year high of 7.79% in October, the average rate on a 30-year mortgage stayed below 7% this year until last month. Even with the recent declines, the rate remains well above where it was just two years ago at 5.25%.

Last month’s rise in rates were an unwelcome development for prospective homebuyers in the midst of what’s traditionally the busiest time of the year for home sales. On average, more than one-third of all homes sold in a given year are purchased between March and June.

Sales of previously occupied U.S. homes fell in March and April as home shoppers contended with rising mortgage rates and prices.

This month’s pullback in mortgage rates has spurred a pickup in home loan applications, which rose last week by 1.9% from a week earlier, according to the Mortgage Bankers Association.

“May has been a better month for the mortgage market, with the last three weeks showing declining mortgage rates and increasing applications,” said MBA CEO Bob Broeksmit. “Rates below 7% are good news for prospective buyers, and MBA expects them to continue to inch lower this summer.”

(AP)