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Mortgage rates dropped for the sixth straight week, but housing activity remained muted going into the holidays.

The rate for the average 30-year fixed mortgage slipped to 6.27% from 6.31% the week prior, according to Freddie Mac. Rates have fallen more than three-quarters of a point since mid-November after the Federal Reserve signaled that it would slow its interest-rate hikes amid cooling inflation.

Still, rates remain 3 percentage points higher than they were at the start of the year, leaving many first-time buyers on the sidelines and sellers — who haven’t pulled their listings — more willing to negotiate.

“Heading into the holidays, mortgage rates continued to move down,” said Sam Khater, Freddie Mac’s chief economist said in a press release. “Rates have declined significantly over the past six weeks, which is helpful for potential homebuyers, but new data indicates homeowners are hesitant to list their homes. Many of those homeowners are carefully weighing their options as more than two-thirds of current homeowners have a fixed mortgage rate of below 4%.”

Housing affordability remains a challenge

Demand for mortgages improved slightly from one week earlier, according to the Mortgage Bankers Association’s survey for the week ending Dec. 16, but purchase activity declined 3% compared with a week prior. Overall, purchase applications were down 36% from a year ago, the MBA noted, as most price-struck buyers have opted to wait longer.