The US Federal Reserve followed through with its much anticipated interest rate reduction as expected by many Wall Street analysts. On September 18 the Federal Reserve approved a fifty-basis rate cut (one basis point is equivalent to 0.01%), marking its first reduction since the pandemic, and the largest single rate cut in 16 years.

Mortgage rates started declining ahead of the Fed's decision, giving a boost to the residential housing market. The National Association of Realtors chief economist Lawrence Yun commented on the Federal Reserve's rate cut move saying, "The Fed's half-point rate cut decision is the beginning of six to eight rounds of further rate cuts well into 2025. Mortgage rates have already anticipated the Fed's likely path. That is why the 30-year rate has fallen by 150 basis points from early in the year to today.

Consumers who were priced out due to earlier higher mortgage rates could now be back in the market."

The Mortgage Bankers Association chief economist also commented, "Mortgage rates likely had this cut - and this expected rate path - priced in, and lower mortgage rates, now close to 6%, have resulted in much more refinance and some additional purchase activity in recent weeks. We do expect that if mortgage rates remain near these levels, it will support a stronger than typical autumn housing market and suggest that next spring could see a real rebound in activity."