Brought to you by Scott P. Rogers, Funkhouser Real Estate Group, 540-578-0102, scott@HarrisonburgHousingToday.com
Brought to you by Scott P. Rogers, Funkhouser Real Estate Group, 540-578-0102, scott@HarrisonburgHousingToday.com
Wednesday, 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.
