Federal Reserve Chair Jerome Powell warned that the housing sector's struggles are likely to continue with interest rate cuts unlikely to move the needle significantly to address challenges with inventory and affordability.
Powell spoke at a press conference Wednesday after Fed policymakers moved to cut the benchmark federal funds rate by 25 basis points for the third consecutive meeting. In his opening remarks, the chairman noted that "activity in the housing sector remains weak."
During the question-and-answer portion of the press conference, Powell was asked specifically about the housing sector's weakness and whether the rate cuts could help improve affordability for homebuyers – particularly for younger people and first-time homebuyers.
"The housing market faces some really significant challenges. And I don't know that, you know, a 25-basis-point decline in the federal funds rate is going to make much of a difference for people," Powell said.
"Housing supply is low. Many people have very, very low-rate mortgages from the pandemic period, and they kept refinancing… so it's expensive for them to move, and we're a ways away from that changing," he added.