The rate dropped to 6.6% from 6.69% last week, mortgage buyer Freddie Mac said Thursday. A year ago, the rate averaged 6.95%.

Borrowing costs on 15-year fixed-rate mortgages, popular with homeowners seeking to refinance their home loan to a lower rate, also eased this week. The average rate fell to 5.84% from 5.96% last week. A year ago, it averaged 6.38%, Freddie Mac said.

The average rate on a 30-year mortgage is now at its lowest level since Oct. 24, when it was at 6.54%.

“The combination of mortgage rate declines, firm consumer income growth and a bullish stock market have increased homebuyer demand in recent weeks,” said Sam Khater, Freddie Mac’s chief economist. “While the outlook for the housing market is improving, the improvement is limited given that homebuyers continue to face stiff affordability headwinds.”

Elevated mortgage rates and rising home prices have kept homeownership out of reach of many would-be homebuyers. U.S. home sales are on track for their worst year since 1995.

Mortgage rates are influenced by several factors, including the moves in the yield on U.S. 10-year Treasury bonds, which lenders use as a guide to price home loans.

The yield, which was below 3.7% as recently as September, has mostly hovered around 4.2% this month. It was at 4.3% at midday Thursday.

The recent decline in rates follows a mostly upward climb since the average rate on a 30-year mortgage slid to a two-year low of 6.08% in late September after the Federal Reserve cut its main interest rate from a two-decade high. While the central bank doesn’t set mortgage rates, its actions and the trajectory of inflation influence the moves in the 10-year Treasury yield.

Many economists and traders on Wall Street expect that the Fed will cut its main interest rate again at its policy meeting next week.

Home shoppers and homeowners seeking to refinance their existing mortgage to a lower rate are taking advantage of the recent pullback in home-loan borrowing costs. Mortgage applications rose 5.4% last week from a week earlier, the fifth straight increase, according to the Mortgage Bankers Association. Refinance loan applications climbed 27%.

“Purchase applications have increased on an annual basis every week except for one over the past three months, a positive sign for the mortgage market to close out this year,” said MBA CEO Bob Broeksmit.

With home prices near all-time highs and still rising nationally, albeit more slowly, many prospective homebuyers are likely holding out for mortgage rates to ease further in coming months.

But there may not be much relief, given that many housing economists predict the average rate on a 30-year mortgage will remain above 6% next year.