Mortgage rates in the U.S. saw a slight decline this week, offering modest relief to prospective homebuyers. The average 30-year fixed mortgage rate dropped to 6.48% from 6.53% the previous week, according to data from Freddie Mac. While this marks a downward shift from recent highs, rates remain above 6% and well below the 6.85% seen a year ago. The broader trend has been upward since early 2026, driven by inflationary pressures linked to the ongoing war in the Middle East, which has disrupted oil shipments and pushed crude prices higher.

The 10-year Treasury yield, a key benchmark for long-term borrowing costs, rose to 4.47%, reflecting investor concerns about prolonged economic fallout. This has kept mortgage rates elevated despite temporary dips. Homebuying activity remains subdued, with mortgage applications falling for the third consecutive week. While existing home sales were flat in April, the full impact of rising borrowing costs continues to weigh on the housing market.

On a more positive note, home shoppers are seeing some favorable shifts: inventory has increased in many markets, and the median listing price dropped 2.4% year-over-year in May—the steepest decline since 2017. Refinancing activity softened, but the 15-year fixed rate also fell, dropping to 5.79% from 5.87%, offering relief to homeowners seeking to refinance.