U.S. mortgage rates moved down slightly this week as a softer housing market continued to weigh on demand. Freddie Mac said the average rate on a 30-year fixed mortgage fell to 6.78%, offering a modest bit of relief to buyers facing still-high borrowing costs.

The small decline comes after months of elevated rates that have kept many would-be homebuyers on the sidelines. Even with the latest dip, financing remains expensive compared with recent historical norms, and affordability is still a major obstacle in many markets.

The slowdown in buyer activity has also helped ease some pressure on rates, reflecting a broader cooling in housing conditions. That may give some buyers more room to negotiate, though prices, inventory shortages and monthly payments continue to challenge households.

For now, the market remains sensitive to changes in inflation, the broader economy and Federal Reserve policy. Any sustained improvement in affordability will likely depend on a clearer decline in borrowing costs or a stronger rise in supply.