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.

Mortgage rates declined to their lowest level since February 2023 after the Federal Reserve instituted a significant interest rate cut. In the past week, the standard 30-year, fixed-rate mortgage averaged 6.

Mortgage rates for September 19, 2024, remain near 5.60%, according to Zillow data. The Fed slashed rates this week, helping mortgage rates stay low after dropping earlier this month. Because the Fed is likely to cut rates further,