Albert Barnes Commentary Psalms 107:7

"He led them also by a straight way, That they might go to a city of habitation." — Psalms 107:7 (ASV)

And he led them forth by the right way - A literal version, if the term necessary to express it might be allowable, would be, "He wayed them in a straight way"; he made a way for them, and that was a straight way. He conducted them in the most direct path to the land to which they were going.

That they might go to a city of habitation - A city where they might permanently dwell. The word "city" here seems to be used in the sense of "abode"; and the idea is, that he led them to a land where they might cease to be wanderers, and might find a settled home.