Mortgage rates continued their ascent this week, but could the trend be shifting?

After hitting a three-year high on Oct. 1, the weekly average mortgage rate in the U.S. was up again Thursday, to 7.4% for a 30-year, fixed-rate loan, according to the Federal Home Loan Mortgage Corporation, better known as Freddie Mac.

The 0.12 percentage point increase follows last week’s big leap of 0.25 percentage points, the largest in four years. The mortgage giant’s weekly average rate is now 1.1 percentage points higher than a year ago.

But the daily index rate at Mortgage News Daily fell a total of 0.09 percentage points Thursday to 7.5%, nearly a two-week low. It was the biggest daily drop in three months and came on a day that began with a 0.01% increase.

No single event was deemed responsible for the “thrills and chills” of multiple reductions in a single day, Mortgage News Daily’s Matthew Graham said, noting “almost every lender lowered their rates today — many of them more than once.”

However, he said there was some benefit from the midday news on the Iran war. President Donald Trump posted on social media the U.S. would not attack Iran prior to the Nov. 3 midterm elections, countering speculation planning was underway for new strikes.

Graham pointed out the movement in the market “doesn’t necessarily hearken additional downward momentum.” Mortgage rates are tied to long-term U.S. Treasury bond yields, which have climbed amid the economic uncertainty fueled by the war.

Before the U.S. and Israel launched the war at the end of February, mortgage rates had just dipped below 6% for the first time since 2022. Since then, rates have largely headed up, raising concerns they could be at 8% or even 9%.

U.S. News and World Report reported that the average interest rate on a 30-year mortgage fell slightly Thursday, to 7.676%, according to data provided by the online real estate marketplace Zillow. On Wednesday, that rate was at 7.685%.

A Zillow senior economist, Kara Ng, told The New York Times Thursday she expects the real estate market to recover once inflation slows and mortgage rates begin to steadily move lower. But Ng said it’s difficult to say when that’s going to happen.

“You’re probably getting peak doom right now,” she told the newspaper.

On Wednesday, Ng said in a Zillow post that mortgage rate increases appear to have slowed.

“Rates are now at their highest level in about three years, but they seem less intent on bulldozing through the 2023 high,” she wrote, adding “the next move is more likely down than up, but our forecast for relief is modest.”

Zillow’s expectation, Ng said, is for the 30-year fixed rate to dip to 7.1% by the end of 2026 and fall further, to 6.5%, by the end of 2027.