-
A September Rate Cut is Not Enough to Relieve the Housing Affordability Crisis
https://cre.moodysanalytics.com/insights/cre-news/september-rate-cut-housing-affordability-crisis/
CRE Moodysanalytics writes:
“Highlights:
- The Federal Reserve unanimously voted to keep its policy rate unchanged at a 23-year high between 5.25% to 5.50% for the eighth consecutive meeting.
- The question for September’s FOMC meeting is no longer if rates will be cut, but rather by how much. Market pricing implies there is a greater likelihood for a half point cut in September than for 25-bps. And by year end, the majority of interest rate traders expect rates to be reduced cumulatively by 100 to 125 bps.
- Presumably, even with the first interest rate cut of this hiking cycle in September, the federal funds rate would still be in restrictive territory with additional cuts needed to help restore the housing market to a more balanced equilibrium.
- As of June 2024, there were 4.1 months’ supply of housing inventory at the current monthly sales pace according to the National Association of Realtors. While six months is generally associated with a balanced housing market, the figure has improved from a low of 1.6 in January 2022.
- Since the beginning of 2024, inventory growth has had a larger effect on the number of months’ supply than existing home sales. While the two variables’ contributions have historically ebbed and flowed, homes are staying on the market longer with the unsold existing home inventory of 1.32 million at the highest level since October 2020. “
To read more, please visit the article below:
cre.moodysanalytics.com
Moody's CRE | A September Rate Cut is Not Enough to Relieve the Housing Affordability Crisis
Explore how current economic conditions are impacting the September rate cut and its implications for the housing affordability crisis.
-
0 Replies
Sorry, there were no replies found.
Log in to reply.