The Mortgage Bankers Association on Wednesday said the contract rate on a 30-year, fixed-rate mortgage declined 15 basis points in the week ended September 5 to 6.49%, the lowest since last October

The interest rate on the most popular U.S. home loan dropped by the most in six months last week after a weak employment report drove benchmark Treasury bond yields down in anticipation of a central bank rate cut at its meeting next week.

The Mortgage Bankers Association on Wednesday said the contract rate on a 30-year, fixed-rate mortgage declined 15 basis points in the week ended September 5 to 6.49%, the lowest since last October.

With the latest decline, the rate has dropped by 60 basis points since mid-January and has fuelled a boost in application volumes both for loans to purchase a home and to refinance an existing loan, according to the data.

The MBA’s weekly applications index added 9.2% last week to 297.7, the highest in over three years. The rise was led by a 12.2% increase in the index tracking applications to refinance a mortgage to its highest in around a year. Refinancing applications accounted for almost half of all applications last week, MBA said.

The index tracking loans for property purchases added 6.6% to its highest in about two months.

The housing market has been in a protracted slump due to a combination of high borrowing costs, higher property prices and limited supply of homes on the market, but recent data indicate the worst may have passed for the sector. The supply of existing homes for sale has been steadily rising, annual price increases have started levelling off, and interest rates now seems ready to drop further as the central bank appears ready to shift gears to lower rates as early as next week.

The bank has left its benchmark rate steady since last December at 4.25%-to-4.50% on concern that President Donald Trump’s aggressive tariffs would fuel an upswing in inflation.