Sales of new homes in the United States cooled less than expected in August, according to government data released Wednesday, with lower interest rates potentially boosting the market going forward.

New single-family home sales came in at an annual rate of 716,000, seasonally adjusted, lower than July's revised 751,000 figure, Commerce Department data showed.

But the number was above a consensus estimate published by Briefing.com, of 695,000.

While the property market took a hit after the Federal Reserve rapidly hiked the benchmark lending rate to counter inflation, new home sales have been helped by tighter supply.

With significantly higher mortgage rates, homeowners have been reluctant to sell their properties -- nudging buyers into the market for new construction.

But this month the Fed made its first rate cut since 2020, and mortgage rates have been declining amid expectations of the reduction. This could, in turn, boost the market for home sales further.

Compared with August 2023, the new home sales rate last month was 9.8 percent higher.

The median sales price was $420,600, slightly lower than in July, according to the report.

As of September 19, the popular 30-year fixed-rate mortgage averaged 6.1 percent, down from around 6.5 percent a month prior according to finance company Freddie Mac.

The rate a year prior was around 7.2 percent, data showed.

Economists Carl Weinberg and Rubeela Farooqi at High Frequency Economics expect it will take time for the Fed rate cut to ripple through the housing market.

"The immediate impact of the near-promise of lower rates to come is that anyone who can postpone a home purchase probably will, to realize even lower mortgage rates six or 12 months from now," they said in a note.

"Recovery of the sector from the recent years of Fed tightening will take a while," the economists added.