The Federal Reserve cut interest rates by 50 basis points and Chair Jerome Powell said the central bank expects the housing market to normalize alongside rates.

Compass Real Estate brokers Tom Postilio and Mickey Conlon join Josh Lipton on Asking for a Trend to discuss what the rate cut means for the US real estate market.

Postilio tells Yahoo Finance the real estate industry is “popping the champagne bottle, because for the last three years it's just been a lot of headwinds,” but the “half a point is big news.”

“August is typically a very sleepy month, [but this year] it was on fire,” Conlon says, explaining that typically there’s less interest in buying a home during the fall season, especially ahead of a presidential election.

“We hit the ground running, and that's all in anticipation of today's announcement,” as it seems people have put aside any election worries aside “because there's so much pent-up demand and there has been for three years” and “this announcement gave [buyers] permission to get off the fence," Conlon states.

Postilio finds this increase in demand activity has been “across the board,” but the luxury sector stands out. Compass Real Estate saw the most signed contracts in the week following Labor Day in nearly two decades, he reports.

“Low inventory and high interest rates” have been “an absolute disaster for first-time buyers because it's really priced them out of the market,” Conlon notes, indicating that the rate cut could help address alleviate these challenges.

For more expert insight and the latest market action, click here to watch this full episode of Asking for a Trend.

This post was written by Naomi Buchanan.