Wall Street is lowering expectations for future Federal Reserve rate hikes.
The 30-year fixed mortgage rate dropped from its recent high of over 8% to 7.40%.
Homebuyers are sensitive to rates, with some unable to afford a home or qualify for a mortgage.
Home sales have been falling for several months, leading some to believe the market is frozen.
The bond market is reacting as if the Fed will cut interest rates next year.
Chief economist for the National Association of Realtors predicts mortgage rates to head towards 7% in a few months and into the 6% range by spring 2024.