WASHINGTON – Fed Chair Jerome Powell told reporters back in June that spiking mortgage rates would see the Pandemic Housing Boom fizzle out. In the eyes of Powell, that would be a good thing. In the months since, economists have openly questioned what Powell meant by a housing “reset.”
Does the Fed simply want buyers to back off long enough to allow inventory to rise? Or does “reset” mean the Fed also wants home prices—which spiked 43% in just over two years—to come down? On Thursday, Powell tried to clarify in a long-winded response.
📈 The Fed raised its benchmark interest rate by 75 basis points for the third time in a row, aiming to curb the highest inflation since 1980s.— FORTUNE (@FortuneMagazine) September 21, 2022
And first-time home buyers are not happy about that. 🧵 https://t.co/3h7kutcE2W pic.twitter.com/J2lYIJELev