U.S. mortgage rates declined for the second consecutive week, according to the latest Primary Mortgage Market Survey released Thursday by mortgage buyer Freddie Mac. The weekly survey, which has tracked home loan rates since 1971, is one of the most closely watched benchmarks for American home loan rates.

The average rate on the benchmark 30-year fixed mortgage slipped to 6.65%, down from 6.67% last week. A year ago, the average rate on a 30-year loan stood at 6.58%. The average rate on a 15-year fixed mortgage also moved lower, easing to 5.95% from 5.96%. Even after the modest easing, rates remain far above the survey's all-time low of 2.65%, recorded in January 2021, keeping affordability a central challenge for prospective buyers.

"With a dip in rates providing modest relief for homebuyers, it's important to remember borrowers can potentially save thousands by shopping around for the best mortgage rate," said Sam Khater, Freddie Mac's chief economist.

Mortgage rates are shaped by several factors, including the Federal Reserve and geopolitics. While the Fed's interest rate decisions do not directly determine mortgage rates, home loan borrowing costs closely track the 10-year Treasury yield, which hovered around 4.7% as of Thursday afternoon.

"Today's print is best understood as the base level from which mortgage rates may push higher next week amid market volatility," said Jake Krimmel, senior economist at Realtor.com. "The 30-year Treasury hit a nearly 20-year high this week, enough to prompt the Treasury Department to step in and buy back billions. But thankfully for homebuyers, since most mortgages are only around for seven to ten years before borrowers refinance or move, mortgage rates track the 10-year, which has not moved nearly as dramatically this week."

The buyback operations referenced by Krimmel are part of a regular program the Treasury Department launched in 2024 to purchase older securities and support trading liquidity in the U.S. government bond market.

Yields on U.S. Treasurys have been elevated recently, in part because of the growth in federal debt. The government is projected to run a budget deficit of roughly $2.1 trillion this fiscal year, according to the nonpartisan Congressional Budget Office (CBO), with the borrowing financed through the issuance of new Treasury securities.

Two Treasury auctions over the past week drew attention as yields reached historic levels. The sale of 10-year notes cleared at a high of 4.683%, the highest level in 19 years, while the 30-year bond auction stopped at 5.216%, a 25-year peak. For homebuyers and homeowners weighing whether to refinance, the benchmark to watch in the weeks ahead remains the 10-year Treasury yield, which moves in response to inflation readings, employment data and shifting expectations for Federal Reserve policy.