(NEW YORK) — Mortgage rates have fallen rapidly in recent months, offering homebuyers an opportunity for some borrowing relief if they move ahead with the big-ticket purchase.

The average interest rate on a 30-year fixed mortgage stands at 6.35%, dropping from 6.5% over the week ending on Thursday, which amounted to the largest one-week drop in mortgage rates this year, FreddieMac data shows. As recently as January, the average 30-year fixed mortgage rate exceeded 7%.

The sharp drop in mortgage rates owes in part to government data showing a significant decline in hiring, which has heightened expectations that the Federal Reserve will slash interest rates and in turn put downward pressure on borrowing costs, some analysts told ABC News.

Each percentage point decrease in a mortgage rate can save thousands or tens of thousands in additional cost each year, depending on the price of the house, according to Rocket Mortgage.

“This is a significant drop,” Ken Johnson, a real estate economist at the University of Mississippi, told ABC News.

The trend poses a quandary for homebuyers, the experts added: Do buyers move quickly to snap up a favorable mortgage or wait to see if interest rates fall even further?

Mortgage rates closely track the yield on a 10-year Treasury bond, or the amount paid to a bondholder annually. Bond yields are shaped in part by expectations of the benchmark interest rate set by the Fed, some experts said.

Five meetings and nine months have elapsed since the Fed last adjusted interest rates. The federal funds rate stands between 4.25% and 4.5%, preserving much of a sharp increase imposed in response to a pandemic-era bout of inflation.

That posture is expected to shift, however. Fed Chair Jerome Powell recently hinted at the possibility of an interest rate cut, appearing to indicate greater concern for flagging employment growth than for rising prices.

Investors peg the chances of three quarter-point rate cuts by the end of this year at about 76%, according to CME FedWatch Tool, a measure of market sentiment.

The anticipated decline of interest rates has already been priced into the level of mortgage rates, however, meaning the path of rate cuts would need to become more aggressive than expected in order to push mortgage rates down further, Lu Liu, a professor at the Wharton School at the University of Pennsylvania, told ABC News.

A further slowdown of the job market could prompt the Fed to cut interest rates more than expected, but a continued resurgence of inflation could deter central bankers from easing rates at the risk of exacerbating price increases.

“Expectations of lower near-term rates are being priced in, so current mortgage rates look a bit more attractive,” Liu said.

Julia Fonseca, a professor at the Gies College of Business at the University of Illinois at Urbana-Champaign, cautioned against homebuyers attempting to predict the level of mortgage rates.

“Trying to time the market or predict future rate movements is notoriously hard to do,” Fonseca told ABC News.

Meanwhile, the typical price of a home has fallen in recent months. The median sales price of a home in the U.S. registered at $410,800 over three months ending in June, which marked a decline from a price of $423,100 over the previous three-month period, U.S. Census Bureau data shows.

“Prices have cooled, inventory is up, time on the market is up,” Fonseca said. “All of this suggests it’s a more favorable market for buyers relative to recent years. That said, it’s really hard to predict what will happen with prices in the future.”

If homebuyers move forward with a purchase but later find that mortgage rates have continued to fall, they can opt to refinance their homes, Fonseca added. She suggested homebuyers avoid mortgage contracts that include pre-payment penalties, since such fees could add to the cost of a potential decision to refinance.

“I would be guided by your needs and your personal financial situation, rather than try to make predictions about future prices and future interest rates,” Fonseca added.

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