The U.S. housing market may be experiencing a recession due to the Federal Reserve’s monetary policies, according to Treasury Secretary Scott Bessent.
He blames high mortgage rates on the central bank, affecting sectors like housing, particularly impacting low-income consumers with debts. Despite a recent rate cut by the Fed, future cuts are uncertain, with Fed Chair Jerome Powell cautioning against preset expectations.
Trump-appointed Fed Governor Stephen Miran warns that tight monetary policy could induce a recession if rates are not adjusted accordingly, emphasizing the need for lower inflation to prompt rate cuts.
While the Fed’s actions can influence mortgage rates, improvements in the broader economy are essential for a more robust housing market, according to Realtor.com® senior economist Joel Berner. Berner highlights sluggish home sales, reduced new home construction, and weakening labor market conditions as significant indicators that the housing market might be at risk of entering a recession.
Key takeaways
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Treasury Secretary Bessent suggests that the U.S. housing market could be in a recession due to the