Mortgage rates fall for the third week in a row. ‘There is room’ for rates to drop further, one economist says.

A year ago, the 30-year rate was averaging 7.5%.

The average rate on the 15-year mortgage was 6.76%, down from 7.81% last week. The 15-year was at 5.98% a year ago.

Freddie Mac’s weekly report on mortgage rates is based on thousands of applications received from lenders across the country that are submitted to Freddie Mac when a borrower applies for a mortgage. 

According to separate data from Mortgage News Daily, the 30-year fixed-rate mortgage was averaging 7.45% as of Thursday afternoon.

What Freddie Mac said: “For the third straight week, mortgage rates trended down, as new data indicates that inflationary pressures are receding,” Sam Khater, chief economist at Freddie Mac, said in a statement. 

“The combination of continued economic strength, lower inflation and lower mortgage rates should likely bring more potential home buyers into the market,” he added.

What are they saying? “There is room for mortgage rates to fall further,” Lisa Sturtevant, chief economist at Bright MLS, said in a statement.

“The gap between the 10-year Treasury yield and the 30-year fixed rate mortgage rate is historically around 180 basis points,” she said. “While the gap has narrowed somewhat, the 30-year mortgage rate remains 280 basis points higher than the bond yield.”

The National Association of Realtors expects the 30-year rate to drop below 7% by the spring buying season, but to stay over 6%.

“I believe we’ve already reached the peak in terms of interest rates,” Lawrence Yun, the NAR’s chief economist, said. “The question is, when are rates going to come down?”