The benchmark 30-year fixed rate mortgage rate declined to 6.48% from 6.53% last week, mortgage buyer Freddie Mac said Thursday

The average long-term U.S. mortgage rate eased this week from its highest level in nine months, welcome relief for prospective homebuyers.

The benchmark 30-year fixed rate mortgage rate declined to 6.48% from 6.53% last week, mortgage buyer Freddie Mac said Thursday. The average rate remains below 6.85%, where it was a year ago.

When mortgage rates decline, they give homebuyers more purchasing power.

Rates have been mostly trending higher since the war with Iran began, disrupting the passage of tankers ferrying crude oil from the Persian Gulf to customers worldwide. That’s sent oil prices sharply higher — a key driver of inflation.

This conflict is currently the main driver of still-high mortgage rates, as the oil shock ripples inflation fears throughout the global economy, said Joel Berner, a senior economist at Realtor.com.

While average long-term mortgage rates remain lower than they were at this time last year, their mostly upward trajectory and uncertainty over how much higher they may go as bond markets react to the economic fallout from the conflict in the Middle East have been a drag on the housing market.

Sales of previously occupied U.S. homes were essentially flat in April after declining from a year earlier in the first three months of the year, extending a nationwide housing slump that dates back to 2022 when mortgage rates began to jump from pandemic-era lows. The May existing home sales snapshot is due out next week.

Recent mortgage applications data are another sign that the upward trend in mortgage rates has many would-be homebuyers on hold.

Mortgage applications, which include loans to buy a home or refinance an existing mortgage, dropped 2.5% last week for the third week in a row, according to the Mortgage Bankers Association. Applications for loans to buy a home remain modestly higher than last year’s levels, but posted their slowest weekly pace since April.