The numbers: Mortgage rates rose in the first week of 2023, as mortgage applications sank to multi-decade lows.

The 30-year fixed-rate mortgage averaged 6.48% as of Jan. 5, according to data released by Freddie Mac on Thursday.

That’s up 6 basis points from the previous week—one basis point is equal to one hundredth of a percentage point.

Last week, the 30-year was at 6.42%. Last year, the 30-year was averaging at 3.22%

Rates are still far lower than they were a month ago, when the 30-year was averaging above 7%.

The average rate on the 15-year mortgage ticked back up to 5.73%.

If rates were to drop, the outlook for the mortgage market in 2023 will be bright, Freddie Mac noted.

“Homebuyers are waiting for rates to decrease more significantly, and when they do, a strong job market and a large demographic tailwind of millennial renters will provide support to the purchase market,” Sam Khater, chief economist at Freddie Mac, said in a statement.

“Moreover, if rates continue to decline, borrowers who purchased in the last year will have opportunities to refinance into lower rates,” he added.

Demand for mortgages has fallen to the lowest level since 1996, the Mortgage Bankers Association reported on Wednesday.

Khater expects inflationary pressures in the U.S. to ease, and rates to drop in 2023.

The yield on the 10-year Treasury note dipped below 3.75% during the afternoon trading session on Thursday.

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