(Reuters) -The interest rate on the most popular U.S. home loan dropped by the most in six months last week after a weak employment report drove benchmark Treasury bond yields down in anticipation of a Federal Reserve rate cut at its meeting next week.

The Mortgage Bankers Association on Wednesday said the contract rate on a 30-year, fixed-rate mortgage dropped 15 basis points in the week ended September 5 to 6.49%, the lowest since last October.

With the latest decline, the rate has dropped by 60 basis points since mid-January and has fueled a boost in application volumes both for loans to purchase a home and to refinance an existing loan, the data showed.

The MBA’s weekly applications index rose 9.2% last week to 297.7, the highest in more than three years. The increase was led by a 1

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