The average rate on a 30-year mortgage edged lower last week, returning to its lowest level in about a year.

The average long-term mortgage rate slipped to 6.3 percent from 6.34 percent the previous week, according to mortgage buyer Freddie Mac. A year ago, the rate averaged 6.32 percent.

The drop brings the average rate back to where it was late last month, after a string of declines brought down home loan borrowing costs to their lowest level since early October 2024.

Borrowing costs on 15-year fixed-rate mortgages, popular with homeowners refinancing their home loans, also eased. The average rate dropped to 5.53 percent from 5.55 percent last week. A year ago, it was 5.41 percent, Freddie Mac said.

“Despite the decline, rates continue to hover within a narrow band they’ve maintained since mid-September, as markets remain in a holding pattern amid fiscal and monetary uncertainty, including the ongoing government shutdown,” said Anthony Smith, senior economist at Realtor.com.

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 to pricing home loans.

The 10-year yield was at 4.13 percent late last week, up from around 4.09 percent a week earlier. The yield has been trending higher since it slid to around 4.02 percent on Sept. 11.

In late July, mortgage rates started declining in the lead-up to the Federal Reserve’s widely anticipated decision last month to cut its main interest rate for the first time in a year amid growing concern about the slowing job market.

Fed Chair Jerome Powell, however, has since signaled a cautious approach to future interest rate cuts. That’s in contrast with other members of the Fed’s rate-setting committee, who are pushing for faster cuts.

Even if the Fed opts to cut its short-term rate further that doesn’t necessarily mean mortgage rates will keep declining.

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.

The average rate on a 30-year mortgage has stayed above 6 percent since September 2022, the year mortgage rates began climbing from historic lows. The housing market has been in a slump ever since.

Sales of previously occupied homes sank last year to their lowest level in nearly 30 years. So far this year, sales are running below where they were at this time in 2024.

In central Ohio, home sales are up 1.3 percent so far this year through August compared to the first eight months of 2024. The average sales price for a home sold in August in the Columbus area was $388,708, which was 4.4 percent higher than in August 2024.

Still, the recent decline in mortgage rates could set the stage for a modest lift in sales in coming weeks, going by recent data on contract signings.

The National Association of Realtors’ seasonally adjusted index of pending home sales rose 4 percent in August from the previous month and 3.8 percent from the same month last year.

There’s usually a month or two lag between a contract signing and when the sale is finalized, which makes pending home sales a bellwether for future completed home sales.

Many homeowners who bought in recent years after rates climbed well above 6 percent, meanwhile, have moved to refinance their existing loan to a lower rate.