This week, the biggest news for the economy was surrounding the Federal Reserve’s decision to pause interest rate hikes, as was expected. However, Fed Chair Jerome Powell remained hawkish during his speech, indicating that two more rate hikes are coming before the year ends.
Let’s take a look at what this means for the housing industry.
Jerome Powell Sees “Housing Bottom”
During his speech, Powell stated,
We now see housing putting in a bottom and maybe even moving up a little bit. We’re watching that situation carefully. I do think we will see rents and house prices filtering into housing services inflation. I don’t see them coming up quickly, I do see them coming, kind of, wandering around at a relatively low level now, and that’s appropriate.
The big takeaway here is that Powell recognizes we’ve seen the bottom on housing—something that has been shown in recent home value reports from CoreLogic and Zillow. These reports, among others, show that not only have home prices hit the bottom, but values are now rising month over month.
Keep in mind that in Q4 2023, the housing market may see a price correction like the one seen in Q4 2022. But since home values are making gains now, it will help homeowners get through any corrections later in the year.
Hot Sheet Recap
In addition to Jerome Powell’s remarks about the housing market, host Byron Lazine discussed the top news stories for the housing industry on The Hot Sheet —real estate’s only live daily show.
Here’s everything you may have missed:
Top Bank Says U.S. Housing Market Dramatically Under Built
Byron started off the week with a housing inventory update from Housing Wire and a Realtor.com report highlighting 10 U.S. cities with the most (and least) amount of inventory. He wrapped up the show with a report from Deutsche Bank on building.
Click any of the timestamps below to watch
CPI Report Reveals Problem with Shelter
Tuesday’s show started with the latest CPI report, which pointed to shelter as the largest contributor to the monthly all items increase. From there, he shared why renters can expect some relief and home price declines.
Watch any of the segments here:
Housing Inflation About to Drop Hard
Wednesday’s show started with updates on mortgage demand and availability and a report that says 98% of homeowners with mortgage loans have below-market mortgage rates. From there, Byron goes into reasons economists say housing inflation will fall soon, and Sternlicht’s sale of rental homes.
Tune in here:
Is the Housing Roller Coaster Finally Over?
The Federal Reserve’s meeting was the first topic of discussion on Thursday’s Hot Sheet, with an overview of the decision to pause rate hikes and what Jerome Powell had to say about the housing market. Plus, why a top real estate CEO says America’s housing market is overvalued.
Watch any of the segments below:
Here’s What Home Buyers Really Want
To end the week, Byron shared how many homeowners with mortgages have rates under 6%—and why the mortgage rate numbers reported by Redfin can be considered good news for the housing market.
From there, he discusses some disconnect between what buyers want and what sellers are willing to do. To end the show, Byron gives a quick look at the 2023 Short-Term Rental Mid-Year Outlook from AirDNA.
Watch by clicking the timestamps below:
