Monetary Policy Enacted By The Fed Contributed To Current Housing Affordability Challenges But Monetary Policy Does Not Seem Likely To Fix The Problem In The Near Future


Monetary Policy Enacted By The Fed Contributed To Current Housing Affordability Challenges But Monetary Policy Does Not Seem Likely To Fix The Problem In The Near Future
By Scott Rogers • March 20, 2024
If you're hoping to understand the current housing affordability challenges (in many or most markets across the US) and how we came to be in the current situation, this article is a good one to read... The Fed won't fix the housing market (Yahoo Finance) Below are a few pertinent excerpts... "We're also well aware that when we cut rates at the beginning of the pandemic, for example, the ... housing industry was helped more than any other industry," Powell said in his January press conference. Indeed, the drastic rate cuts by the Fed at the start of the pandemic resulted in pandemonium in the housing market with an abnormally high number of buyers seeking to buy a home. "And when we raise rates, the housing industry can be hurt, because it's a very interest-sensitive sector. On top of that, we have longer-run problems with the availability of housing. ... There hasn't been enough housing built. And these are not things that we have any tools to address." Indeed, both here in the Shenandoah Valley and in many other markets across the country, there is a shortage of housing. And so, what will get us out of this challenging time for housing affordability? It does not seem that the Fed plans to make any rapid or significant monetary policy changes that would impact housing affordability... and, since the Fed doesn't build houses, they won't be creating any further housing inventory. We can likely expect slow interest rate cuts over the next year or two and hopefully we will see continued construction of new residences to house those who already live in the Shenandoah Valley and those who wish to make it their home now or in the future. Receive Updates by Email Recent Articles: There Are Plenty Of Types Of Houses That Exist That Just Are Not Available To Purchase Home Sales By Price Range In The City Of Harrisonburg Are You Compromising On Aspects Of Your Next Home That You Can Or Cannot Change Later? How Much Slower Are The Winter Months In Our Local Housing Market? Rockingham County and New Home Sales Drive Surge in Area Housing Market Find The Balance Between Optimistic And Realistic Home Pricing Room Size Is Difficult To Understand Solely From Real Estate Photos How Much Would You Value Not Having To Prepare Your Home For Showings? One Out Of Four Homes Is Taking Longer Than A Month To Sell Consider The Cost Of Your Planned Renovations When Planning Your Offer
Have any questions? Contact Scott Rogers at 540-578-0102 or scott@funkhousergroup.com
Based on information from the Harrisonburg-Rockingham Association of REALTORS® or its MLS, for the period Jan 1, 2000 through Nov 21, 2024 (unless otherwise noted).
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