Here's the magic number for mortgage rates that could revive demand from home buyers

• There's a magic number for mortgage rates that could revive demand for housing, according to a new report.
• But in the meantime, home prices still have room to drop before home buyers are enticed back to the market.

There might be a magic number for mortgage rates that's low enough to revive demand for buyers dealing with affordability issues.

According to a recent report from John Burns Research & Consulting, the tipping point for the 30-year fixed mortgage rate is about 5.5%. In a recent survey, 62% of consumers told the firm that they believed a "historically normal" mortgage rate fell below 5.5%, and 71% reported they weren't willing to buy a home with rates above that threshold.

The 30-year fixed mortgage rate is hovering just above 6% – one reason why 55% of consumers surveyed said they believe it's currently a bad time to buy a home, John Burns reported.

"Our consulting team has witnessed this across the country, noting that home builders who choose to subsidize buyers' mortgage rates, bringing the overall rate down below 5.5%, have been achieving the most success," the firm said in a note.

Mortgage financing costs have stuck around near a 20-year-high, partly due to the Federal Reserve's aggressive interest rate hikes to control inflation.

That's pressured housing demand over the past year and led home prices to drop in some markets, with experts warning of a potential crash in home values. Prices have already fallen as much as 10% in key metropolitan cities, and national home prices just notching their steepest annual decline in 11 years, according to Redfin data.

Though mortgage rates have pulled back from recent highs, home prices have more room to drop before there's any "meaningful recovery," according to Pantheon Macroeconomics' chief economist Ian Shepherdson, who previously predicted prices could drop another 15%-20% this year.

"Affordability remains the key constraint on home sales," Shepherdson said in a note on Thursday. "We estimate that seasonally adjusted median existing home prices have fallen by a total 3.3% since the summer, but they need to drop much further before the market clears."