The average rate on a 30-year mortgage edged higher this week, holding close to its lowest level in more than a year.

The rate rose to 6.49% from 6.47% last week, mortgage buyer Freddie Mac said Thursday. A year ago, the rate averaged 7.09%.

Borrowing costs on 15-year fixed-rate mortgages, popular with homeowners refinancing their home loans, also rose this week, pushing the average rate up to 5.66% from 5.63% last week. A year ago, it averaged 6.46%, Freddie Mac said.

Despite the modest uptick, mortgage rates are expected to keep trending lower overall this year, as 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.

"In 2023, the 30-year fixed-rate mortgage nearly hit 8%, slamming the brakes on the housing market," said Sam Khater, Freddie Mac's chief economist. "Now, the 30-year fixed-rate hovers around 6.5% and will likely trend down in the coming months as inflation continues to slow. Lower rates are good news for potential buyers and sellers alike."

The rate on a 30-year mortgage is influenced by several factors, including how the bond market reacts to the central bank's interest rate policy decisions. That can move the trajectory of the 10-year Treasury yield, which lenders use as a guide to pricing home loans.

After jumping 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.

The elevated mortgage rates, which can add hundreds of dollars a month in costs for borrowers, have discouraged home shoppers, extending the nation's housing slump into its third year.