"Mortgage rates fell again this week due to expectations of a Fed rate cut," said Sam Khater, Freddie Mac's chief economist. "Rates are expected to continue their decline, and while potential home buyers are watching closely, a rebound in purchase activity remains elusive until we see further declines."
Elevated mortgage rates, which can add hundreds of dollars a month in costs for borrowers, have kept many would-be home buyers on the sidelines, extending the nation's housing slump into its third year.
Signs of waning inflation and a cooling job market have raised expectations that the Federal Reserve will cut its benchmark interest rate next month for the first time in four years.
Sales of previously occupied US homes are running below last year's pace, though they ended a four-month slide in July.
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