The average rate on a 30-year mortgage in the U.S. dropped to its lowest point in 19 months this week, influenced by a decline in Treasury yields as the Federal Reserve is anticipated to cut interest rates next week. Reaching 6.20%, down from 6.35% the previous week, this rate is notably lower than the 7.18% average from a year ago. This marks the lowest average rate seen since February 12, 2023 when it was at 6.12%.

Moreover, there was a decrease in borrowing costs for 15-year fixed-rate mortgages, often selected by homeowners aiming to refinance at a more favorable rate. The average rate for these mortgages fell from 5.47% to 5.27% this week. In contrast, a year ago, the rate stood at 6.51%.

Speculation surrounding an impending cut to the Fed’s benchmark interest rate has intensified due to signs of dwindling inflation and a cooling job market. If the expected rate cut materializes, it would be the first of its kind in four years at the upcoming meeting of policymakers.