Mortgage rates have declined for seven consecutive weeks in a welcome shift for a housing market that has struggled with affordability challenges since the post-pandemic boom.

Rates are highly influential in affordability for buyers with percentage points being worth hundreds of dollars on monthly mortgage payments. Buying a home is in one of its most unaffordable periods ever in the U.S., particularly for first-time homebuyers who do not have equity in a previous home to cash in on.

Freddie Mac said Thursday the average rate on a 30-year, fixed-rate mortgage is 6.63%, down from 7.04% in January when the streak of declines started. Rates averaged 6.88% a year ago and have mostly held steady around 7% since last year.

Mortgage rates tend to follow the yield on 10-year Treasurys that are influenced by investor expectations on the economy, inflation and the Federal Reserve’s interest rates. Yields have dropped in recent weeks in response to the uncertainty looming over the U.S. economy from inflation and a back-and-forth tariff policy from the White House.

Shrinking yields are helpful to homebuyers and are coming at a time with the spring selling season is just beginning.

“We’ve seen extreme volatility in rates over the last several weeks as the market tries to piece together how they’ll move amid uncertainty from the new administration and policies like tariffs.,” said Emanuel Santa-Donato, SVP and chief market analyst at Tomo Mortgage. “We expect 30-year rates to hover around 6.875% through year-end, with inflation and fiscal policy playing a major role. However, given the current uncertainty, it’s difficult to say when the dust will settle from these more significant market movements.”

Higher mortgage rates have been more burdensome for first-time homebuyers, but have also affected existing homeowners, many of which bought or refinanced during the period of ultra-low rates and have been hesitant or unable to give them up to move elsewhere. The so-called “lock-in effect” has led to issues with the supply of homes on the market and has increased prices.

There has been some progress in increasing the existing home supply recently with more homeowners adjusting to a higher interest environment and modest improvements in available rates. The National Association of Realtors said total inventory increased 16.8% in January compared to last year in its most recent existing home sales report.

More homes are expected to come onto the market as the spring homebuying season gets underway. Continued improvements in mortgage rates could lead to more sales. Unsold inventory was at a 3.5-month supply in January, below a balanced market that comes with a five- to six-month supply that hasn’t been reached since 2012.

“Historically, we’ve seen inventory start to unlock when the rate gap narrows to 1.5-2% and we think there is a psychological aspect to rates that start with ‘5’and if 30-year fixed rates broadly become available below 6% we may see a large uptick in inventory,” Santa-Donato said

Increased supply on the market would help continue a recent trend of prices increasing at a slower pace nationally, though affordability issues are likely to persist after 19 consecutive months of increases during a low period for homebuying activity. Redfin said recently that median home-sale prices rose just 3.5% year-over-year for the four weeks ending Feb. 23, the smallest increase since September.

Even at a slower pace of increases, homeownership is still an overly expensive proposition for most Americans with median prices for both new and existing homes around $400,000. A family earning the national median income needs to spend almost 40% of its income to afford a home. Low-income families who make 50% of the median income have to spend 74% of their earnings to afford a typical mortgage payment on an existing home, according to the National Association of Home Builders.

The higher rate environment has added challenges for increasing the supply of homes for builders that are also being hit with higher costs for inflation and labor and are now facing the prospect of tariffs that could further ramp up costs.

While President Donald Trump announced another month-long delay on tariffs for products from Canada and Mexico on Thursday, builders would be hit hard by the levies especially for crucial materials like lumber, steel and concrete. Steel has already been tariffed by the administration in a move that will likely lead to increase costs for builders.

Have a news tip? Contact Austin Denean at atdenean@sbgtv.com or at x.com/austindenean.