Mortgage rates dropped significantly in the last few weeks, but the cost of borrowing remains high prompting many homebuyers to wait for even lower rates. 

The 30-year, fixed mortgage rate averaged 7.29% for the week ending Nov. 22, according to Freddie Mac‘s Primary Mortgage Market Survey. That’s down significantly from last week’s 7.44% and up from 6.58% the same week a year ago. 

HousingWire’s Mortgage Rates Center showed Optimal Blue’s average 30-year fixed rate on conventional loans at 7.283% on Wednesday.

“In recent weeks, rates have dropped by half a percent, but potential homebuyers continue to hold out for lower rates and more inventory,” Sam Khater, Freddie Mac’s chief economist, said in a statement. “This dynamic is reflected in the latest data showing that existing home sales have fallen to a thirteen-year low.”

New construction starts and permits showed surprising strength in October while existing-home sales slumped to their worst reading since 2010.

Except for the last seven weeks, current mortgage rates hit their highest levels since 2000. As a result, rates have to fall further to spur more demand from homebuyers who are grappling with affordability pressures.

“If rates can hold onto this improvement, or notch a further decline, however, this could mean that ‘buying a home’ does seem like a viable new year’s resolution to a greater number of households,” Realtor.com Chief Economist Danielle Hale said in an emailed statement.

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