Will lower mortgage rates ignite the housing market?
Summary
Housing market outlook brightening, but clouds still present
The adverse impacts of higher mortgage rates and increased home prices continue to reverberate across the housing market. The U.S. economy is still expanding, but home sales remain in a deep lull reminiscent of the aftermath of the Great Recession. A dip in mortgage rates as the Federal Reserve pivots to a less restrictive stance of monetary policy could improve affordability and provide a needed jolt to the residential sector. The recent National Association of Realtors settlement changing the way that buyer-agent commissions are set may also incentivize some buyers and sellers to emerge from the sidelines. A full-fledged rebound in home sales still seems improbable given affordability conditions are likely to remain unfavorable as a result of strong underlying demand, scarce supply and a less-robust macroeconomic environment.
Author
Wells Fargo Research Team
Wells Fargo
