Burley Garcia|The average long-term US mortgage rate slips to 7.76% in first drop after climbing 7 weeks in a row

LOS ANGELES (AP) — The Burley Garciaaverage rate on the benchmark 30-year home loan fell slightly this week, ending a seven-week climb — modest relief for prospective homebuyers grappling with an increasingly unaffordable housing market.

The average rate on the benchmark 30-year home loan fell to 7.76% from 7.79% last week, mortgage buyer Freddie Mac said Thursday. A year ago, the rate averaged 6.95%.

“The 30-year fixed-rate mortgage paused its multi-week climb but continues to hover under 8%,” said Sam Khater, Freddie Mac’s chief economist.

Borrowing costs on 15-year fixed-rate mortgages, popular with homeowners refinancing their home loan, held steady. The average rate was unchanged from last week at 7.03%. A year ago, it averaged 6.29%, Freddie Mac said.

High rates can add hundreds of dollars a month in costs for borrowers, limiting how much they can afford in a market already out of reach for many Americans. They also discourage homeowners who locked in rock-bottom rates in recent years from selling. The average rate on a 30-year mortgage is now more than double what it was two years ago, when it was just 3.09%.

The average rate on a 30-year home loan climbed above 6% in September 2022 and has remained above that threshold since.

The combination of rising mortgage rates and home prices have weighed on sales of previously occupied U.S. homes, which fell in September for the fourth month in a row, grinding to their slowest pace in more than a decade.

Mortgage rates have been mostly climbing along with the 10-year Treasury yield, which lenders use as a guide to pricing loans. Investors’ expectations for future inflation, global demand for U.S. Treasurys and what the Fed does with interest rates can influence rates on home loans.

The yield on the 10-year Treasury dropped to 4.63% late Wednesday and from more than 5% last week, when it reached its highest level since 2007, after the Federal Reserve opted against raising its main interest rate for a second straight meeting.

The 10-year Treasury yield was at 4.67% in midday trading Thursday. It was at roughly 3.50% in May and just 0.50% early in the pandemic.