The average long-term U.S. mortgage rate eased back from a seven-month high this week, a welcome change for homebuyers navigating high borrowing costs and heightened competition for relatively few homes for sale.

Mortgage buyer Freddie Mac said Thursday that the average rate on the benchmark 30-year home loan fell to 6.71% from 6.79% last week. A year ago, the rate averaged 5.23%.

The pullback follows three straight weekly increases, which pushed up the average rate to its highest level since early November, when it climbed to 7.08%.

The average rate on 15-year fixed-rate mortgages, popular with those refinancing their homes, also fell this week, slipping to 6.07% from 6.18% last week. A year ago, it averaged 4.38%, Freddie Mac said.

“While elevated rates and other affordability challenges remain, inventory continues to be the biggest obstacle for prospective homebuyers,” said Sam Khater, Freddie Mac’s chief economist.

The number of Americans applying for unemployment benefits last week rose to its highest level since October 2021, but the labor market remains one of the healthiest parts of the U.S. economy.

The Labor Department reported Thursday that U.S. applications for jobless claims were 261,000 for the week ending June 3, an increase of 28,000 from the previous week’s 233,000. Weekly jobless claims are considered representative of U.S. layoffs.

The four-week moving average of claims, which evens out some of the weekly variations, rose by 7,500 to 237,250.

“The latest reading reflects a holiday-shortened week (Memorial Day), which ought to raise suspicions that the big move was more noise than signal,” said Stephen Stanley, chief U.S. economist for Santander. “I am eager to see next week’s reading before I draw any conclusions.”