America’s home affordability crisis has a solution. Lower rates isn’t it
CNN
The Federal Reserve’s interest rate cut last week has given prospective homebuyers something to celebrate: lower borrowing costs.
The Federal Reserve’s interest rate cut last week has given prospective homebuyers something to celebrate: lower borrowing costs. The half-percentage-point cut took rates off a 23-year high, where they’d been for more than a year, and the central bank signaled that more cuts could be on the way. 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, taking an ever-growing share of Americans’ paychecks and savings accounts. “No question this is good news,” said Shaun Donovan, a former US Secretary of Housing and Urban Development, told CNN of the Fed’s rate cut. “But there’s a lot more we have to do to solve an unprecedented housing crisis in this country.” Both Vice President Kamala Harris and former President Donald Trump have proposed ways to increase the housing supply. For good reason: There currently aren’t enough homes for sale to keep up with demand.
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