Mortgage rates took a break from their steady upward climb this week. The 30-year fixed-rate mortgage is averaging 5.70% for the week ending June 30, according to Freddie Mac's benchmark rate survey.

"The rapid rise in mortgage rates has finally paused," Sam Khater, Freddie Mac's chief economist, said in a statement. Looking forward, Khater said, this "... should help the housing market rebalance from the breakneck growth of a seller's market to a more normal pace of home price appreciation."

Today's lower rate is welcome news for potential buyers who are contending with higher mortgage payments and a still-competitive market.

This is the first week in the past month that the 30-year rate has decreased. Since January 6, rates have increased by more than half a percentage point, rising to a 14-year high of 5.81% last week.

Freddie Mac's average rates for both the 15-year fixed-rate mortgage and the 5/1 adjustable-rate loan are mixed this week. The 15-year rate moved down to 4.83% while the 5/1 increased to 4.50%.

What’s next for mortgage rates?

Today's decrease in rates could be a temporary blip.

Mortgage rates have been quickly moving higher since the beginning of the year as the economic recovery from the pandemic, supply chain shortages and disruption caused by the Russian invasion of Ukraine pushed inflation to a 40-year high.

In an effort to bring prices back down to earth, the Federal Reserve has increased the federal funds rate—the agency's benchmark interest rate—by a total of 1.25 percentage points so far this year. The Fed has signaled it would consider additional increases over the coming months, too.

If this scenario plays out, mortgage rates may climb even higher before eventually leveling out. Looking forward, most market observers expect the 30-year rate should stay above 5% for the foreseeable future.

What can homebuyers expect?

For potential homebuyers, navigating the housing market remains a challenge.

The median home price reached an all-time high of $450,000 this month, up nearly 17% year-over-year, according to Realtor.com. At the same time, higher mortgage rates have pushed the monthly payments for this size loan to about $2,100 per month, not including taxes, insurance or fees. That's almost $800 higher than the monthly payment on a same-priced home last June.

All of this has led to a slowdown in demand — as many potential buyers are priced out of the market. At the same time, more sellers are putting their homes up for sale, many hoping to take advantage of high home prices before the market slows even more. (The inventory of U.S. homes for sale has increased by nearly 19% in June compared to the same time last year.)

For lucky buyers who can still afford a home in this market, the rise in inventory combined with less competition from other buyers means more options to choose from, and a little more power when it comes time to negotiate.

"Looking at the next few months ... "Buyers and sellers will find themselves on more equal footing," George Ratiu, manager of economic research at Realtor.com. said in a statement.