The Fed’s Rate Path Is Too Cautious to Fix Housing
Growing pessimism about a rebound is taking hold among companies tied to residential construction.
A slow build.
Photographer: Jordan Vonderhaar/Bloomberg
The Federal Reserve has long been able to depend on the housing boost from interest rate cuts juicing the US economy. This time looks different.
More than a percentage point of central bank easing and another percentage point of expected easing have done little to reassure the residential construction industry. As buyers stay on the sidelines, a growing pessimism about the near-term outlook is taking hold among companies. It’s unlikely that the rate-cut trajectory we’re currently on will halt a decline in construction activity and employment, an ominous sign for economic growth and the labor market next year.