(Bloomberg) -- Mortgage rates in the US fell for a third straight week, hitting the lowest level in more than two months and offering a measure of relief to would-be homebuyers. 

The average rate for a 30-year, fixed loan was 6.49%, down from 6.58% last week and the lowest since Sept. 22, Freddie Mac data showed Thursday. 

Mortgage rates have retreated after crossing 7% for the first time in more than two decades. Still, loan costs have more than doubled since starting the year around 3%, throwing cold water on the pandemic housing boom and pushing homeownership out of reach for many Americans.

Federal Reserve Chair Jerome Powell signaled Wednesday that the central bank may slow the pace of its benchmark-rate hikes starting this month, but stressed more increases will be needed to beat inflation. A gauge of consumer prices watched closely by the Fed had its second-smallest gain this year in October while spending rose, offering hope that the effort is working without spurring a recession. 

Read more: Powell’s ‘Most Important’ Inflation Indicator Is Cooling Down

Higher mortgage rates have sent demand for homes sliding. That’s pressuring prices, which dropped 1.2% in September from August, according to the S&P CoreLogic Case-Shiller index of values in 20 major cities. Contracts to buy previously owned US homes fell for a fifth month in October, data from the National Association of Realtors show.

“Even as rates decrease and house prices soften, economic uncertainty continues to limit homebuyer demand as we enter the last month of the year,” Sam Khater, Freddie Mac’s chief economist, said in a statement. 

For buyers still in the hunt, the monthly payment on a $300,000 loan would be $1,894 at the current 30-year average, about $118 less than when rates hit their high point of 7.08%. 

The pace of inflation will continue to dictate Fed policy and, by extension, mortgage rates in the coming months, according to Nicole Bachaud, an economist at Zillow. 

“If we continue to see inflation data showing that prices are coming down, and the risks of a recession move further past, then we will likely see rates stabilizing,” Bachaud said in an interview.

(Updates with monthly payment in third-to-last paragraph.)

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