Homebuyers are in a pinch: Costs are notably high, and inventory is notably low. Now America’s major housing associations are pointing fingers at the Federal Reserve, calling for action.
The Mortgage Bankers Association, the National Association of Realtors and the National Association of Home Builders penned an open letter to the Fed, pleading for it to reconsider its current interest rate policy.
The Federal Reserve slashed interest rates to near zero in the wake of the pandemic when the economy ground to a halt. Then, in an effort to prevent the economy from overheating and get the high pandemic era inflation under control, the central bank hiked rates. The Fed’s benchmark rate currently sits in the range of 5.25%-5.50%.
But the letter to the Fed emphasizes growing nervousness about the fallout of high rates.
Recent data points highlight the mounting pressure on homebuyers. Mortgage rates have reached a 23-year high, while application activity has hit the lowest level since the mid-1990s.
The letter asks the Fed to firmly announce no further rate hikes and ensure a hands-off approach on mortgage-backed securities holdings — at least until the housing market once again sits on a solid foundation. While the message may be intended for the central bank, it provides a welcome signal to homebuyers struggling with the tough market, too: you are not alone in your frustration.
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