The average rate on a 30-year mortgage eased for the second week in a row and remains at its lowest level in more than a year, good news for prospective homebuyers facing home prices near all-time highs.

The rate fell to 6.35% from 6.46% last week, mortgage buyer Freddie Mac said Thursday. A year ago, the rate averaged 7.18%.

The last time the average rate was this low was May 11, 2023.

Borrowing costs on 15-year fixed-rate mortgages also fell this week, good news for homeowners seeking to refinance their home loan at a lower rate. The average rate fell to 5.51% from 5.62% last week. A year ago, it averaged 6.55%, Freddie Mac said.

"Mortgage rates fell again this week due to expectations of a Fed rate cut," said Sam Khater, Freddie Mac's chief economist. "Rates are expected to continue their decline, and while potential homebuyers are watching closely, a rebound in purchase activity remains elusive until we see further declines."

Signs of waning inflation and a cooling job market have raised expectations that the Federal Reserve will cut its benchmark interest rate next month for the first time in four years.

Elevated mortgage rates, which can add hundreds of dollars a month in costs for borrowers, have kept many would-be homebuyers on the sidelines, extending the nation's housing slump into its third year.

Sales of previously occupied U.S. homes are running below last year's pace, though they ended a four-month slide in July.

After climbing to a 23-year high of 7.79% in October, the average rate on a 30-year mortgage has mostly hovered around 7% this year -- more than double what it was just three years ago. But this month, the average rate has made its biggest downshift in more than a year.