The interest rate for the most popular U.S. home loan fell last week to its lowest level in two years, on anticipation that the Federal Reserve would start cutting interest rates today, which it did by a half of a percentage point.

The average contract rate on a 30-year fixed-rate mortgage dropped 14 basis points in the week ended Sept. 13, to 6.15%, the Mortgage Bankers Association said today. That was the lowest rate since Sept 2022, and followed a 14-basis-point drop the previous week.

Applications for home loans for purchases and refinancing jumped last week, the MBA said, citing lower borrowing costs and improved housing affordability as home prices rose more slowly.

Applications to refinance existing home loans now account for more than half of all mortgage applications, the data show, and are above the historic median of 48%.

That’s an indication that homeowners are already taking advantage of the drop in mortgage rates to lower their monthly house payments, giving a potential boost to their spending even before the Fed touched the dial on its policy rate.

U.S. mortgage rates peaked about 11 months ago at nearly 8%, and have dropped about 175 basis points as the Fed signaled its 2022-2023 rate-hike campaign had ended and that its next move would be a rate cut.

The Fed wraps up its Sept. 17-18 meeting later today, and along with a rate cut is also expected to publish fresh projections for the policy rate path over the next few years. Its most recent projections, in June, pointed to 125 basis points of cuts through the end of 2025. Analysts expect this month’s projections to incorporate a bigger drop.