Mortgage rates declined for the first time in six weeks, following a 12-day period in which the benchmark 10-year Treasury fell 31 basis points from its high to low points.

The 30-year fixed rate mortgage averaged 7.09% on May 9, compared with 7.22% the prior week and 6.35% one year ago, the Freddie Mac Primary Mortgage Market Survey found.

On April 25, the 10-year yield hit a high of 4.74%; this rate started backing down in anticipation of, then in reaction to the Federal Open Market Committee meeting on April 30 and May 1.

On May 7, the 10-year hit a low of 4.42%, before pushing back up to 4.49% at 11:30 a.m. eastern time on May 9.

LenderPrice product and pricing engine data as posted on the National Mortgage News website at the time, put the 30-year FRM at 7.115%. At that time last week, it was 7.36%

Freddie Mac Chief Economist Sam Khater attributed the drop to a weaker-than-expected jobs report.

“An environment where rates continue to hover above 7% impacts both sellers and buyers,” Khater said in a press release. “Many potential sellers remain hesitant to list their home and part with lower mortgage rates from years prior, adversely impacting supply and keeping house prices elevated.“

The 15-year FRM averaged 6.38%, a 9 basis point drop from 6.47% one week ago, but 63 basis points higher than 5.75% one year prior.

While Zillow’s rate tracker had the 30-year FRM climbing 3 basis points to 6.84% on Thursday morning from the prior day, it was still 10 basis points lower than the prior week’s average.

Slowdowns not just in the labor market, but in housing are why rates fell this week, said Orphe Divounguy, senior economist at Zillow Home Loans, said in a Wednesday evening statement.

“Financial market participants anticipate two 25-basis point cuts in the federal funds rate before the end of the year as well,” Divounguy said. “Last week, the Federal Reserve chair put to rest the idea of potential rate hikes and indicated yet again that Fed policy is restrictive and should help bring inflation down further.”

Divounguy also pointed to the Fed slowing down the pace of runoff in its Treasury securities portfolio in an effort to pull yields lower.

The FOMC statement put to bed any notion that rate reductions are inevitable, said David Adamo, the CEO of Luxury Mortgage.

“The impact is that mortgage rates continue to stay elevated even as homeowner affordability is the most challenging for so many existing and would-be homeowners,” Adamo said. “One important fact to point out is that we are now 12 months away from the re-set date for the first wave of 5/1 [adjustable rate mortgages] that were taken out at the beginning of the pandemic fueled refinance boom in [the first and second quarters] of 2020.”

As a result, those borrowers will be going from rates that were in the mid-2% range to, if they remain where they are currently, in the mid-7% area.

“Add to that the increase in real estate taxes, homeowners insurance and the cost of utilities and that will just add more fuel to the affordability fire that is already burning,” Adamo said.

In the short-term, inflation data will be controlling the mortgage market.

“Next week’s consumer price index and producer price index releases will likely cause more repricing activity,” Divounguy said. “Expect more rate volatility ahead as the Fed and investors wait for more conclusive evidence of a return to low, stable and more predictable inflation.”