STORY: The interest rate for the most popular U.S. home loan plunged to its lowest level in 15 months.

That's according to the Mortgage Bankers Association, which said on Wednesday that the average rate on a 30-year mortgage fell to 6.55%.

It comes after the Federal Reserve signaled at its last meeting that it could start cutting interest rates in September.

And a weaker-than-expected July jobs report has bolstered financial market bets the interest rate cuts would be big.

The Fed left rates steady at the end of its July meeting but said it was now just as focused on the health of the labor market as it was on bringing down inflation.

San Francisco Fed President Mary Daly said that shift in communication has translated to lower mortgage rates as investors anticipate the central bank's next move, adding (quote):

"You already see policy working, even before we cut the rate."

The decline in the 30-year mortgage gives potential homebuyers some long-hoped-for relief in what has become an increasingly unaffordable housing market in recent years, as home prices and borrowing costs both rose.

The average rate on the 30-year mortgage peaked at 7.9% last October.