U.S. homebuyers got some relief this week as borrowing costs eased further. The average rate on a 30-year fixed mortgage fell to 6.74%, marking the lowest level since early January, according to industry data cited by Reuters.

The drop followed a decline in bond yields after the Federal Reserve signaled it could cut rates in the coming months. Mortgage pricing tends to move with Treasury yields, so investors’ expectations for easier policy can quickly feed into home-loan costs.

Even with the latest decline, housing affordability remains a challenge for many buyers. Rates are still well above the unusually low levels seen during the pandemic, and elevated home prices continue to weigh on demand in many markets.

Analysts say the next moves from the Fed will be closely watched by borrowers, lenders, and the broader housing sector. If yields continue to ease, mortgage rates could drift lower again — though any sustained relief will depend on inflation and the central bank’s path forward.