It will take more than just a drop in interest rates to save the housing market

By Samantha Delouya
CNN
September 23, 2024
Category: Finance & Economics
Region: United States

The Federal Reserve’s interest rate cut last week has given prospective homebuyers something to celebrate: lower borrowing costs. …But while lower mortgage rates may translate to more buying power for homebuyers, America’s housing market woes aren’t likely to be solved solely by rate cuts. A shortage of homes for sale, combined with rising expenses like homeowners’ insurance and rent, have made the cost of both owning and renting a home in America increasingly unaffordable for many. …This shortage of homes has helped propel home prices to record highs. According to the National Association of Realtors, the median existing-home sales price was $416,700 in August, down slightly from the record high of $426,900 set in June. …There’s another reason: Many Americans bought homes in the years after the pandemic when rates were at historic lows. Many of those homeowners have been reluctant to sell and lose those cheap loans.

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