Mortgage rates in the U.S. have dropped for the ninth consecutive week, reaching their lowest level since May, according to data from Freddie Mac.

The rate on a 30-year fixed mortgage fell to 6.61% from 6.67% the previous week. Despite the decrease, potential homebuyers continue to face challenges due to limited housing inventory. “A drop in rates makes it more likely that prices will start heading higher earlier than normal in 2024, and higher prices will erase some of the benefits of lower mortgage rates,” said Keith Gumbinger, vice president of HSH.com. The Federal Reserve’s decision to hold its benchmark rate steady in December and plans to cut rates up to three times in 2024 have improved economists’ outlook for mortgage rates.

However, the recent decline in rates has not yet spurred a significant response from homebuyers, which is typical during the holiday season. This may change in the new year if rates remain low. “If rates remain low into the middle of next month, there’s a good likelihood that we’ll see a fairly strong response on the part of potential homebuyers,” Gumbinger said.

Despite the challenges, there have been some positive signs in the housing market. Existing home sales increased for the first time in five months in November, and the volume of refinance applications jumped as much as 19% in the week ending Dec. 8. However, it will take a few months for these changes to fully impact the market.

Read more at Yahoo Finance.