Mortgage rates dropped to their lowest level since early February after the Federal Reserve set the stage for a September interest rate cut.

The average rate on the 30-year fixed-rate mortgage fell to 6.73% from 6.78% a week prior, Freddie Mac reported on Thursday. A year ago, the average rate on a 30-year fixed-rate loan was 6.9%.

Separately, the average rate for the 15-year fixed mortgage was 5.99%, down from 6.07% a week prior. The rate on a 15-year loan was 6.25% a year ago.

The data's release came a day after the Fed held interest rates steady at its July policy meeting but hinted that it's closer to cutting rates as it cited "some further" progress on inflation . Fed Chair Jerome Powell told reporters a September cut "could be on the table."