Mortgage rates dropped this week after two bank failures inflamed investor fears.

The rate on the average 30-year fixed mortgage fell to 6.60% this week, down from 6.73% the week prior, according to Freddie Mac. The rate tracks the 10-year Treasury yield, which has fallen over 40 basis points from last Thursday’s close as investors bet the Federal Reserve could slow its interest-rate hiking campaign after Silicon Valley Bank and Signature Bank collapsed and worries emerged over Credit Suisse and First Republic Bank.

Freddie Mac’s survey runs from Thursday to Wednesday, with results published on Thursday.

The sudden drop in rates revived some activity in the housing market, encouraging some sidelined buyers to make moves. Still, the high volatility of the market could keep other folks on pause.

“I think there’s still a lot of uncertainty, but in the near term, I do expect rates to drop,” Daryl Fairweather, chief economist at Redfin, told Yahoo Finance on Monday. “I expect buyers to take advantage of those mortgage rates because we’ve seen buyers be incredibly sensitive to those interest rates.”

Buyers rush to lock in lower rates

As rates slid toward the end of last week, some homebuyers rushed to capitalize on that window of opportunity, uncertain how long it would last.

The volume of applications to purchase a home increased 7% from one week earlier, the Mortgage Bankers Association’s survey for the week ending March 10 found. Overall purchase activity remained 38% lower than the same week one year ago.

“People are right to lock in a rate during a dip,” Jeff Reynolds, broker at Compass and founder of UrbanCondoSpaces.com, told Yahoo Finance on Monday. “Around the first week of March, rates were up in the 7s. If you lock today, you’ll be saving almost 50 basis points, which is crazy. It’s a significant payment difference.”

Will a rate drop last?

Rates likely will remain volatile as markets weigh which will affect the Federal Reserve’s decision more next week on interest rates — the shockwaves from this week’s bank failures or the latest still-hot inflation reading. The European Central Bank on Thursday hiked its short-term interest rate by a half-point despite the banking turmoil.