The average rate on a 30-year mortgage eased for the second week in a row and now sits 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, popular with homeowners seeking to refinance their home loan to a lower rate, also eased this week. 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 the Federal Reserve will cut its benchmark interest rate next month for the first time in four years.

Traders on Wall Street see a high likelihood the Fed will lower its main interest rate by at least 1 percentage point by the end of the year, according to data from CME Group. That suggests the bond market has already priced in a series of Fed rate cuts this year, which could limit further easing in mortgage rates.

“As such, we shouldn’t expect the downward movement in mortgage rates to accelerate unless worse-than-expected economic indicators suggest the market is headed for anything but a soft landing,” said Ralph McLaughlin, senior economist at Realtor.com.

Most economists expect the average rate on a 30-year home loan to remain above 6% this year. Realtor.com’s latest forecast calls for the average rate to go no lower than 6.3% by the end of the year.

After climbing to a 23-year high of 7.79% in October, the average rate on a 30-year mortgage has hovered around 7% for most of this year. That’s more than double what it was just three years ago.

Sales of previously occupied U.S. homes are running below last year’s pace, though they ended a four-month slide in July as homebuyers seized on more attractive mortgage rates.

In Massachusetts,  home sales ticked up more than 8% in July and put 2024 sales just ahead of last year’s sluggish pace.

The Warren Group last week reported 4,427 single-family home sales in Massachusetts in July, representing an 8.2% increase over July 2023 sales. The median sale price of $650,000 — a new record high for the month of July — was up 6.6%  over July 2023’s $610,000 median price.

But Warren Group Associate Publisher Cassidy Norton found a slight silver lining for prospective homebuyers.

“Yes, a median sale price of $650,000 was a new all-time high for the month of July, and month after month prices are setting new records, but price gains are smaller than they could be,” she said. “Interest rates are more than double where they were two years ago, and I’m certain prices would be even higher without those changes. That does lead to a lack of inventory that may have abated price gains somewhat.”

That lack of inventory, a longstanding problem that makes it more expensive and more difficult to live in Massachusetts, “will continue to be the biggest factor driving prices for the foreseeable future,” Norton added.