Itsabuyersmarketandnobodyisbuying:WhereIsJeromePowell?

Published: Thursday, August 21, 2025 at 11:00 am

Real Estate Market Stagnation: A Call for Action

The U.S. real estate market is experiencing a significant slowdown, with sales figures indicating a concerning trend. Existing-home sales in June 2025 reached 3.93 million, a 2.7% decrease from May and the slowest pace since September 2024. New-home sales also remained stagnant, barely budging at 627,000 annualized, 6.6% below June 2024.

This slowdown is attributed to several factors. High mortgage rates are deterring potential buyers, with the average 30-year fixed rate at 6.58% this week, the lowest since October 2024. While this may seem positive, it's not enough to overcome affordability challenges. Many homeowners are hesitant to move due to "golden handcuffs," where they are locked into low interest rates from previous years and cannot afford to move to a new home at current rates. Job market uncertainty and the return to in-office work are also contributing to the reluctance to relocate.

Inventory levels are rising, with active listings up 24.8% year-over-year in July, reaching post-pandemic highs. However, this increase hasn't translated into increased sales, as affordability remains a major obstacle. Price drops are occurring in some markets, but buyers are still hesitant due to the high cost of insurance and property taxes.

The article suggests that the Federal Reserve, led by Jerome Powell, could play a crucial role in revitalizing the market. While mortgage rates are not directly controlled by the Fed, Powell can influence the interest rate environment. The author argues that Powell should take action to lower interest rates, as the current situation is unsustainable. The author notes that mortgage rates in other countries are significantly lower than in the U.S.

BNN's Perspective: The current real estate market stagnation presents a complex challenge. While the Fed's actions are not the sole determinant of market health, they can significantly influence the environment. A measured approach that considers both inflation and the need for market stability is crucial. The Fed must balance the need to control inflation with the need to support a healthy housing market.

Keywords: real estate market, housing market, home sales, mortgage rates, interest rates, Jerome Powell, Federal Reserve, affordability, inventory, existing-home sales, new-home sales, golden handcuffs, price drops, insurance costs, stagnation

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