Powell Asserts Rate Cuts Won’t Aid Struggling Housing Sector
Federal Reserve Chair Jerome Powell recently emphasized the ongoing struggles in the housing sector. He stated that lower interest rates alone are unlikely to resolve major issues such as high property prices and limited inventory. Powell’s remarks came after the Federal Reserve cut the benchmark federal funds rate by 25 basis points for the third consecutive meeting.
Powell Highlights Challenges in Housing Market
During a press conference, Powell acknowledged the persistent weakness in the housing market. He explained that while we’ve seen interest rate cuts, their impact might not significantly aid struggling homebuyers, particularly younger and first-time buyers.
Key Factors Affecting Housing Affordability
- Low housing supply
- High existing mortgage rates
- Pandemic-era refinancing making moves expensive
Powell pointed out that many homeowners secured low-rate mortgages during the pandemic and may hesitate to move due to higher current rates. This behavior further constrains housing supply, creating a situation where market intervention through monetary policy becomes ineffective.
Long-term Supply Issues Persist
According to Powell, the United States has faced a chronic underbuilding of homes for many years. He noted the urgent need for diverse types of housing to better serve the market.
Current Economic Predictions
Despite the Federal Reserve’s recent rate cuts, which total 75 basis points over the last three meetings, the housing market has not shown signs of recovery. Projected effects of future rate cuts remain uncertain, as members of the Fed’s monetary policy panel forecasted only one more cut in 2026.
Delistings Surge Amid Market Struggles
The challenges within the housing sector have led to a spike in delistings. Data from Realtor.com reveals that delistings increased by 38% in October compared to the same month last year. Furthermore, 2025 has become the year with the highest monthly delisting rates since tracking began in 2022.
Statistics on Delistings
- Delistings up 45% in 2025 compared to the same period in 2024
- Approximately 6% of listings have been removed monthly since June 2025
The combination of high prices, low inventory, and unfavorable mortgage conditions continues to challenge potential buyers, deepening the issues within the housing market.
