The average rate on a 30-year mortgage in the US fell to 6.58% this week, its lowest in nearly 10 months, offering prospective homebuyers a boost in purchasing power amid a sluggish housing market, Freddie Mac reported on Thursday. The long-term rate declined from 6.63% last week, while a year ago it averaged 6.49%, AP reported.Borrowing costs on 15-year fixed-rate mortgages, favoured by homeowners refinancing loans, also eased to 5.71% from 5.75% last week, compared with 5.66% in the June 2024 quarter, Freddie Mac said.Economists attributed the decline to a combination of market expectations and recent economic data. “Homebuyers who have been relegated to the sidelines by high financing costs got some encouragement in the past two weeks, but it remains to be seen if it’s enough to get more of them back in the game,” said Joel Berner, senior economist at Realtor.com.Mortgage applications jumped 10.9% last week, largely driven by refinancing activity, which accounted for nearly 47% of all submissions and caused a 23% surge in total refi applications compared to the prior week—the strongest since April. Adjustable-rate mortgage applications rose 25% to their highest level since 2022, the Mortgage Bankers Association reported.The latest decline marks the fourth consecutive week of easing rates, bringing the average 30-year mortgage to its lowest level since October 24, when it averaged 6.54%. Mortgage pricing is influenced by the 10-year Treasury yield, which was at 4.29% midday Thursday, slightly up from 4.24% late Wednesday.The recent trend follows weaker-than-expected July US job data, which fuelled speculation that the Federal Reserve may cut its short-term interest rate next month. Analysts noted that a rate cut could stimulate the job market and broader economy but may also push inflation higher, a concern compounded by tariffs under President Trump’s policies.Economists generally expect 30-year mortgage rates to remain above 6% this year, though forecasts from Realtor.com and Fannie Mae suggest an easing to around 6.4% by year-end.The Mortgage Bankers Association reported a 10.9 per cent rise in mortgage applications last week. Most of the increase came from refinancing, which made up 47 per cent of all applications and surged 23 per cent from the previous week, marking the strongest refi week since April. Applications for adjustable-rate mortgages (ARMs) climbed 25 per cent to the highest level since 2022.