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 years end.Existing home sales, which make up the vast majority of the market, slumped 2.5% in August from the prior month to a seasonally adjusted annual rate of 3.86 million, the National Association of Realtors reported Thursday. That was likely the lowest August sales level since 1995, NAR chief economist Lawrence Yun said on a call with reporters.Meanwhile, home prices continued to climb last month, with the median price of an existing home rising 3.1% to a new record high of $416,700, which marked the 14th straight year-over-year increase.Home sales were disappointing again in August, but the recent development of lower mortgage rates coupled with increasing inventory is a powerful combination that will provide the environment for sales to move higher in future months, Yun said in a release.