Sales of previously owned homes in the United States fell sharply in August, despite mortgage rates plummeting that month. But much more housing demand will likely be unleashed onto the market after the Federal Reserve finally cut interest rates this week for the first time in four years — and signaled more rate cuts by year’s end.

US mortgage rates declined last week to the lowest level since September 2022 in anticipation of Federal Reserve interest-rate cuts, stoking an influx of applications for home purchases and refinancing.

The decline in mortgage costs, influenced by expectations of the Federal Reserve’s rate moves, could revive interest in buying, selling and remortgaging, economists said.