Too many homeowners haveaffordable mortgagesthat are worth keeping, which is a problem for the housing market.
Fewer sellers lead to scant options for buyers looking for homes on the market.
But don’t expect dramatically lower mortgage rates any time soon.
The central bank’s interest rate decisions influence home loan rates, but it doesn’t directly set them.
“The price of homes and inflation have really outpaced income,” Sly says.
Another major problem for the housing market?
Sellers are usually also buyers.
Of course, the other side of the housing inventory equation is brand-new residential construction.
In the last year,newly built homeshave become an increasingly popular option for buyers who can afford them.
Read more:Mortgage Rates Aren’t the Only Hurdle for Homebuyers.
There Aren’t Enough Houses
What will it take for homeowners to start selling?
Fed Chair Jerome Powell acknowledged as muchin his Sept. 18 remarksfollowing the rate reduction.
“This is not something that the Fed can really fix,” Powell said.
This underscores the challenges posed by low inventory,high home pricesand inflation, regardless of interest rates.
