(Bloomberg) — US mortgage rates slid last week to the lowest level since February 2023, emboldening homebuyers and spurring a pickup in refinancing applications in welcome news for the real estate market.

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The contract rate on a 30-year fixed mortgage dropped 14 basis points to 6.29% in the week ended Sept. 6, marking the sixth straight weekly decline, Mortgage Bankers Association data showed Wednesday.

Cheaper financing costs fueled a 1.8% gain in the group’s home-purchase applications index, which now stands at the highest level in nearly two months. Mortgage applications to refinance climbed 0.9% to the second-highest level since May 2022.

Weeks of declining mortgage rates are helping move more prospective buyers off the sidelines and into a market still challenged by lean inventories of previously owned homes and elevated prices.

The average contract rate on a 15-year mortgage fell 27 basis points to 5.71%, also the lowest since February 2023. Adjustable-rate mortgages declined as well.

Mortgage rates track US government securities, and the yield on the 10-year Treasury note has fallen to a one-year low in anticipation of a series of interest-rate cuts by the Federal Reserve. Policymakers meet next week and are expected to begin to ease monetary policy.

The MBA survey, which has been conducted weekly since 1990, uses responses from mortgage bankers, commercial banks and thrifts. The data cover more than 75% of all retail residential mortgage applications in the US.

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