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Chair of Organizational Conservation Jerome Powell He warned that the cases of the housing sector are likely to continue with a decrease in interest rates that may be more relevant to address the challenges of innovation and affordability.
Powell spoke at a press conference Wednesday afterward Fed policy makers It moved to cut the benchmark Federal Funds rate by 25 basis points for the third consecutive meeting. In his opening remarks, the chairman noted that “activity in the housing sector remains weak.”
During the question-and-answer portion of the press conference, Powell was asked specifically about the weakness of the housing sector and that a reduction in the rate could help improve the resilience of the population – especially at home.
“The housing market is facing some really significant challenges. And I don’t know that, you know, a 25 basis point drop in the federal funds rate is going to make a big difference for people,” Powell said.
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The chairman of the Federal Reserve Chairman Jerome Powell said that the puppies of the housing sector are likely to continue despite the reduction of interest rates. (Chip somodevilla / Getty Images)
“The housing supply is low. A lot of people have very low mortgages from the conflict period, and they continue to appreciate … so it’s expensive for them to move, and we’re a way to change that.
Powell also said that the main factors that suppress the The Housing Market Is the lack of supply, which is not something that can be studied directly through monetary policy.
“We haven’t built enough housing in the country for a long time, so most estimates suggest we need more housing of different types,” Powell said.
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High housing prices, low innovation and high inflation have led to weakness in the housing sector. (Loren Elliott/Bloomberg via Getty Images)
“Housing is going to be a problem and really, the tools to address it – we can raise and lower interest rates, but we don’t really have the tools to say, you know, the housing shortage,” he added.
Although the Fed Fed Cut interest rates In its last three policy meetings to 2025, 75 basis points of reductions have not boosted the housing market so far – and some of the rates decided entering the New Year are doubtful.
Members of the Monetary Policy Panel issued a summary of economic forecasts, commonly known as “can’t speak“which predicted just one rate cut in 2026.
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Powell said the lack of home construction in recent years has impacted the accessibility programs in the sector. (David Paul Morris/Bloomberg/Getty Images)
The housing sector has struggled amid a lack of inventory, which has contributed to higher prices. – Come in tax rateswhich have not yet been directly linked to the Fed’s benchmark rate, have also contributed to the challenges faced by consumers.
Those dynamics led to the influence of Layoffs by vendorswith the latest Realtor.com’s latest reports to find that the decrease in October was up 38% compared to the same month last year. Additionally, layoffs between 2025 and now are 45% from the same period in 2024, the report said.
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About 6% of book lists since June have been removed from the market by their sellers every month, marking 2025 as the year with the highest rate since tracking began in 2022.
