Jeff Flock, a reporter for FOX Business, recently discussed on Varney & Co. how regulations—including mandatory EV wiring, solar-ready roofs, and tougher insulation standards—are pushing home construction costs higher.
Federal Reserve Chairman Jerome Powell expressed concerns about the ongoing challenges in the housing market, indicating that significant changes are unlikely regarding rate cuts that could ease inventory and affordability issues.
During a press conference on Wednesday, Powell noted that, for the third time in a row, the Fed reduced the benchmark federal funds rate by 25 basis points. He remarked that “activity in the housing sector remains weak.”
When asked if lower interest rates could improve housing affordability for young and first-time buyers, Powell said, “The housing market faces some very significant challenges, and I don’t know if a 25 basis point reduction in the federal funds rate will make a big difference for people.”
Despite the Fed’s rate cuts amid uncertainty in the labor market and inflation, Powell acknowledged that the challenges in housing supply are beyond monetary policy’s influence.
“We haven’t been building enough housing in this country for a long time,” he explained, emphasizing the need for more housing of all types. “Many estimates suggest we need more housing of all kinds.”
Although the Fed has implemented three consecutive rate cuts, they haven’t spurred the housing market as anticipated. Looking ahead, the Fed’s economic forecasts suggest only one rate reduction might occur in 2026.
The ongoing troubles in the housing market are significantly driven by low inventory and rising house prices, noted Powell, highlighting the structural issues that continue to challenge affordability for buyers. Recent data indicated a 38% increase in delistings—homes taken off the market—compared to the previous year.
Overall, 2025 has seen the highest rate of delistings since records began in 2022, with around 6% of listings being removed from the market each month since June.
