The falling mortgage rate makes a difference.

I'm David Brancaccio in New York, a bit of relief in recent days for prospective home buyers,

average rates for 30-year fixed-rate mortgages have fallen to their lowest level since August.

People have noticed, with increases in new mortgages and refinance applications, according to

the Mortgage Bankers Association.

Marketplace's Henry Epp is here with more.

David, let's put this in context. Yes, mortgage rates are falling, but they're

coming down from nearly 8%. That's a level we hadn't seen since the year 2000. So now they've cooled off closer to 7%, and that's a bit more manageable for people looking to buy a home. But rates are still significantly higher than anything we've seen for the past couple decades which

makes it tough for many folks to afford a home. And we've seen that reflected in

declining number of home sales and the number of people choosing to refinance but

if rates keep going down presumably

some of this eases.

On the refinancing side the Mortgage Bankers Association thinks activity may have hit its

low point this year and that if rates continue to decline, more people

will decide it's a good time to get a better deal on their outstanding home loans.

But in terms of home sales, we'll need to wait for more data.

Remember, mortgage rates were at record lows just a couple

years ago so people who bought homes then got really good deals meaning if they don't need to

move right now they don't have much incentive to sell their home and take out a much more expensive mortgage.

So that's led to low inventory of available homes, so we've seen sales of existing homes fall throughout this year.

Even sales of new homes have declined recently as

rates have risen, so we'll be watching to see if those trend lines reverse if

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