With mortgage rates hovering near 7%, Moody’s chief economist Mark Zandi warns of a looming slump in the U.S. housing market unless rates decline soon. The housing sector, once a stabilizer, is now becoming a “full-blown headwind” for the economy.

In a promising development for homebuyers, average mortgage rates have dipped to their lowest levels since early April. This decline offers a glimmer of hope for buyers struggling amidst rising home prices.

Existing-home sales in the U.S. saw a modest increase of 0.8% in May, even as high mortgage rates continued to challenge buyers.

Mortgage interest rates eased this week as the Federal Reserve maintained short-term rates, hinting at potential cuts in the fall. The average 30-year fixed-rate mortgage fell eight basis points to 6.86%, offering a glimmer of hope for prospective homebuyers.