No, we had the ZIRP era for too long and there’s still too much stupid money in the economy. Let it burn itself out and let the economy reorient towards more efficiency which is what high interest rates force your economy to be.
Trying to call for rate reductions now would be so poorly planned I hope you never get anywhere near the federal reserves power structures.
They're going to lower rates before the election. Then come Jan/Feb, the market is tanking, home prices will drop further, and the fed will start aggressively lowering rates.
Cheaper mortgage rates means institutional capital that was otherwise sitting on the sidelines in T-bills will be deployed directly into that remaining supply.
Just start building already, 6.8 % for the 30-year fixed is well within historical precedent. High housing prices are a result of asset inflation for a product priced at the margin. Only way around that is to increase supply.
(Also consider this: there is nothing more unproductive than real estate - the stupid capital must be forced out of the mattress and into productive ventures.)
Until workers in the US are making a living wage, pay affordable prices for their shelter and healthcare needs, and are not $500 away from a life changing economic event, wages must be driven higher and immigration must be restrained (even if this drives up costs and reduces profits). More job openings due to lower interest rates increases competition for workers, driving up wages.
Yours is a recipe for inflation. The shelter thing is key. We need to build a lot more of it at a price we can afford and that means we have to keep a lid on wages, which will be OK because we'll be driving down the cost of shelter. Fully agreed on the reduce profits bit; middleman profits are the key component of both shelter and grocery inflation.
Shelter inflation is driven by supply shortages. There is no appetite for increased immigration crowding out domestic workers to keep prices low for new inventory homebuyers. The electorate already has substantial support for deporting the ~11M unauthorized folks in the country today [1]. Mass deportations are highly unlikely, but it is a reasonable proxy for increased immigration appetite. Build more housing, pay living wages to labor performing the work, cut cost of capital, compress profits for new housing if necessary [2] [3]. As your comment mentions above with regards to the credit card spread and profits, homebuilders are milking the housing market in a similar manner, because they can. More immigration doesn't solve that, it just makes us all worse off (reducing domestic worker opportunity and increasing affordable housing competition) to support homebuilder profits.
