The average rate on a 30-year mortgage in the U.S. eased for the fifth week in a row to its lowest level since late December, a welcome boost for prospective homebuyers in what’s traditionally the busiest time of the year for home sales.

The average rate fell to 6.85% from 6.87% last week, mortgage buyer Freddie Mac said Thursday. A year ago, it averaged 6.9%.

Borrowing costs on 15-year fixed-rate mortgages, popular with homeowners seeking to refinance their home loan to a lower rate, also eased this week. The average rate fell to 6.04% from 6.09% last week. A year ago, it averaged 6.29%, Freddie Mac said.

Rising home prices and elevated mortgage rates, which can add hundreds of dollars a month in costs for borrowers, have kept many prospective home shoppers on the sidelines, especially first-time buyers who don�t have equity from an existing home to put toward a new home purchase.

Sales of previously occupied U.S. homes fell last year to their lowest level in nearly 30 years, extending a national home sales slump that began in 2022 as mortgage rates began to climb from their pandemic-era lows.

The average rate on a 30-year mortgage is now at its lowest level since Dec. 26, when it was also 6.85%. It briefly fell to a 2-year low last September, but has been mostly hovering around 7% this year.

�This stability continues to bode well for potential buyers and sellers as we approach the spring homebuying season,� said Sam Khater, Freddie Mac�s chief economist.

Mortgage rates are influenced by several factors, including how the bond market reacts to the Federal Reserve�s interest rate policy decisions.

The latest pullback in rates echoes a decline in the 10-year Treasury yield, which lenders use as a guide for pricing home loans.

The yield was at 4.79% just a few weeks ago, reflecting fears that inflation may remain stubbornly higher amid a solid U.S. economy and the potential impact of tariffs and other policies proposed by the Trump administration.

The 10-year yield was at 4.5% in midday trading Thursday, following a report showing that more U.S. workers applied for unemployment benefits last week than economists expected.

(AP)