, Columnist
Weird, Yes, But Housing Really Needs a Slower Economy
Slowing inflation alone hasn’t been enough to lower borrowing costs — shutting out both America’s first-time homebuyers and those keen to sell and upgrade.
A frozen resale market has pushed up demand for new homes.
Photographer: Scott Olson/Getty Images North AmericaThis article is for subscribers only.
The hope for the US resale housing market a year ago was that inflation would peak, interest rates would fall, and lower mortgage rates would help unfreeze the buying and selling of existing homes. That hasn't happened.
While inflation has declined, real economic growth has, if anything, accelerated. Faster growth has pushed mortgage rates to a 22-year high, sending mortgage purchase applications to their lowest level since 1995 last month.