U.S. mortgage borrowing costs edged lower this week as investors increased their expectations that the Federal Reserve could cut interest rates at its next meeting. The decline offered modest relief to homebuyers and homeowners watching financing costs remain elevated.

According to the latest data cited by Reuters, the average 30-year fixed mortgage rate fell to 6.79%, marking the lowest level in three weeks. The drop reflects a broader shift in bond and rate markets, where traders have grown more confident that policymakers may soon begin easing borrowing costs.

Even with the recent dip, mortgage rates remain high by historical standards and continue to pressure affordability in many housing markets. For buyers, a small decrease can still affect monthly payments, but it has not yet translated into a major rebound in demand.

The coming Federal Reserve meeting will be closely watched for clues about the central bank’s outlook on inflation, growth, and the pace of any future cuts. For now, the move in mortgage rates suggests financial markets are beginning to price in a less restrictive lending environment.