The 15-year FRM had a larger decline, at 20 basis points, to 5.27%, versus the prior week's 5.47%. For the same week in 2023, the 15-year FRM averaged 6.51%.

"Rates continue to soften due to incoming economic data that is more sedate," Sam Khater, Freddie Mac chief economist, said in a press release. "But despite the improving mortgage rate environment, prospective buyers remain on the sidelines, as they negotiate a combination of high house prices and persistent supply shortages."

Lender Price product and pricing engine data posted on the National Mortgage News' website put the 30-year FRM almost 30 basis points lower at 6.105% as of 11 a.m. Thursday morning, down from 6.403% one week ago. Another PPE provider, Optimal Blue, had the 30-year FRM at 6.103% on Wednesday, down from 6.292% seven days prior.

"Mortgage applications have now increased in five of the last six weeks, buoyed by a jump in refinance activity," Bob Broeksmit, president and CEO of the Mortgage Bankers Association, said in a Thursday morning commentary on the group's Weekly Application Survey. "The purchase market is also showing signs of improvement, and MBA expects that to continue as housing supply increases and rates fall further."

Even though the 30-year FRM was up 3 basis points between Wednesday and 11 a.m. on Thursday according to Zillow's rate tracker to 5.72%, it was still 13 basis points lower than last week's average rate of 5.85%.

"Mortgage rates eased again this week as employment growth looks set to stall, raising downside risk to economic growth," Orphe Divounguy, senior economist at Zillow Home Loans in a statement sent out Wednesday night.

"Higher downside risk to economic output will pull yields lower along with the mortgage rates that tend to follow."

Divounguy does not expect mortgage rates to move much lower from where they are following next week's Federal Open Market Committee meeting where at least a 25 basis point reduction in the Fed Funds Rate is expected. That is because the markets are already anticipating the cut and it is already priced into the 10-year Treasury yield.

"That is unless the Fed chair [Jerome Powell] points to larger rate cuts in the future than previously thought," Divounguy commented. "With that said, expect more volatility as the market processes the new information coming from the Fed's latest dot plot."

The benchmark 10-year Treasury yield was 3.69% at 11 a.m. Thursday morning, up 4 basis points from Wednesday's close but down 4 basis points from Sept. 5.