The interest rate for the most popular U.S. home loan slid to its lowest in 16 months, after Federal Reserve Chair Jerome Powell signaled the central bank was ready to lower borrowing costs next month to keep the job market from weakening further.

The average contract rate on a 30-year fixed-rate mortgage fell 6 basis points in the week ended Aug. 23, to 6.44%, the Mortgage Bankers Association said today. That was the lowest since April 2023.

The decline in mortgage rates, by 38 basis points in four weeks, has kept refinancing applications elevated, as homeowners who bought when rates were even higher moved to lock in lower monthly payments. The MBA 30-year average rate topped out at 7.9% last October.

Mortgage applications and purchase applications edged up just 0.5% and 1% respectively, as would-be homebuyers hold out for a further drop in rates.

Interest-rate futures reflect bets the Fed will cut short-term rates by a full percentage point by the end of this year.

Rising borrowing costs and a limited number of new and existing homes offered for sale have helped make home ownership increasingly out of reach for many. Democratic presidential nominee Kamala Harris and her Republican rival Donald Trump have made housing affordability integral to their pitch to voters in the November presidential election, with both promising to reduce costs for Americans in different ways.