Fed Powell: On the housing market (Video)
The Fed is trying to get the national housing market back on a sustainable path. The big question is, will raising interest rates be the right answer.
Updated: Boston Real Estate Blog 2022
Click Here to view: Google Ford Realty Inc Reviews
Now he’s done it.
Rates were very low. A good place to start is rates were very very low for quite a while because of the pandemic and you know the need to do everything we could to support the economy when unemployment was 14% and the true unemployment rate was well higher than that. So …
And that … that was a, uh, rates were low and now they are coming back up to more normal or above levels. So … in the meantime, while rates were low and while demand was really high … obviously demand housing changed from wanting to live in urban areas to some extent to living in single-family homes in the suburbs. Famously. And so, the demand was just suddenly much higher.
So we saw prices moving up very very strongly for the last couple of years.
So that changes now. And rates have moved up. We are well aware that mortgage rates have moved up a lot. And you are seeing a changing housing market. We are watching it to see what will happen.
How much will it really affect residential investment? Not really sure.
How much will it affect housing prices? Not really sure. Obviously, we are watching that quite carefully. You’d think over time … There is a tremendous amount of supply in the housing market of unfinished homes … and as those come online …
Whereas the supply of finished homes and inventory of finished homes for sale is incredibly low. Historically low. So it’s a very tight market. So prices might keep going up for a while, even in a world where rates are up. So it’s a complicated situation and we watch it very carefully.
I’d say if you are a homebuyer, somebody, or a young person looking to buy a home, you need a bit of a reset. We need to get back to a place where supply and demand are back together and where inflation is down low again, and mortgage rates are low again.
This will be a process where ideally, we do our work in a way where the housing market settles in a new place. And the housing and credit availability are at appropriate levels.
One of the most powerful players in the world is making moves that will negatively affect every American, and he’s not sure how it will turn out? Did you ask anyone? Did you seek advice from anybody who is actively involved with the real estate market (not economists) to get some opinions?