The average contract interest rate for 30-year fixed-rate mortgages with conforming loan balances ($766,550 or less) decreased to 6.29% from 6.43%.

Borrowing costs on 15-year fixed-rate mortgages, popular with homeowners seeking to refinance their loans to a lower rate, also eased.

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.