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%.

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.

“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.”

Retail figures come in strong

Americans stepped up their spending at retailers last month by the most in a year and a half, easing concerns that the economy might be weakening under the pressure of higher prices and elevated interest rates.

The Commerce Department reported Thursday that retail sales jumped 1% from June to July, the biggest such increase since January 2023, after having declined slightly the previous month. Auto dealers, electronics and appliance stores and grocery stores all reported strong sales gains.

“The ongoing resilience of consumer spending should ease recession fears and reduce the odds markets have placed on a larger (half-point) cut” at the Fed’s meeting in mid-September, said Michael Pearce, an economist at Oxford Economics. Instead, economists increasingly expect the Fed to begin cutting interest rates next month with a modest quarter-point reduction in its key rate, which affects many consumer and business loans.