Rates for home loans fell for the fourth straight week, even as the specter of higher borrowing costs looms.

In the week ending Feb. 13, 30-year fixed-rate mortgages averaged 6.87%, Freddie Mac announced Thursday, the lowest in nearly two months. Those figures don’t include fees and points, and rates in some parts of the country may be higher or lower than the national average.

Last week, the 30-year-fixed averaged 6.89%.

Rates were lower by just a few points, but it was enough to lure many Americans into the market for a refinance. Applications for refinances jumped 10% over the course of the week, touching the highest level since October, the Mortgage Bankers Association said Wednesday.

The reprieve may be short-lived. On Wednesday, the Labor Department reported that inflation hit a seven-month high in January.  

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“While some components are likely one-off, such as higher egg prices from the bird flu, some increases like those seen in car and car insurance prices appear to be in anticipation of tariffs,” wrote Zillow Home Loans economist Kara Ng in an emailed release. “This trend could continue to build in the coming months as businesses adjust to the new tariff news, which is already pushing up near-term inflation expectations.”

More:Trump's tariffs will raise the roof on home prices

The housing market now is “characterized by uncertainty, as stubborn inflation and elevated rates create a more challenging environment for buyers,” Ng added. “Homes are taking longer to sell, and sellers are increasingly resorting to price cuts to close deals.”

Despite higher rates and prices that haven’t backed down, industry participants are optimistic home sales will rise in 2025 after touching a 30-year low in 2024. Mortgage Bankers Association economists project a 5% rise, and Fannie Mae’s economics team has a 6% gain penciled in, according to a January compilation of forecasts from the Urban Institute.