Main Content

The Fed Faces Pressure From Real Estate And Banking Coalition

Pressure On The Fed

Hey there, readers! It's been a hectic month here at LUXE BLOG. We've uploaded a TON of content. Why? Because the market is in a unique place. What's the best way to take advantage of such indifferent trends? By paying attention. Today, we have more real estate news. Recently, there was a plea made to the Fed. Here's what happened and why.

A Plea To The Fed

  • Real estate and banking bigwigs are concerned.
  • A letter was sent to the Federal Reserve.
  • They're sounding the alarm on rising interest rates.

With housing costs soaring and an alarming dip in homes available for purchase, top industry players have raised their concerns. The Mortgage Bankers Association, the National Association of Realtors, and the National Association of Home Builders collaborated on a letter to the Federal Reserve Board of Governors and Chair Jerome Powell. Their message? They're unsettled about the recent interest rate hikes and the market's unpredictability. Their collective voice emphasizes the strain these rates are causing. Especially when the real estate market is already grappling with challenges.

Also Read: NAR’s Call To Action Helps Gov Avoid Shutdown And Extend NFIP

A man signing a letter.

Real Estate And Banking Leaders Have Penned A Letter To The Federal Reserve

The Fed's Recent Moves

  • 11 rate hikes since March 2022.
  • Current rate hovers between 5.25%-5.5%.
  • Highest in nearly 22 years.

The Federal Reserve has been active. While some officials believe there's room to pause further increases, there's no strong inclination to ease these rates. This comes when the housing industry is witnessing tight inventory levels, a price surge of nearly 30% since the beginning of the pandemic, and a decline in sales volumes by over 15% compared to last year. The current environment is causing genuine distress in affordability. All while disrupting a market already facing a significant pullback in mortgage origination and home sale volume.

Housing Market Statistics

  • Average 30-year mortgage rate approaches 8%.
  • Average home price is a staggering $407,100.
  • Home inventory is equivalent to a mere 3.3 months.

These statistics paint a picture of a market in flux. According to NAR, the inventory would need to double to stabilize prices! The letter from our industry leaders underscores the unprecedented nature of these challenges, especially when there isn't broader economic upheaval.

Also Read: White House Names Phoenix One Of Five US Workforce Hubs

Ariel photo looking down on a piece of real estate.

There Have Been 11 Rate Hikes Since March 2022

Wrapping Up

Staying informed and making decisions based on the most accurate and timely data is crucial. While the future of interest rates remains uncertain, what's clear is the need for stability and support from institutions like the Federal Reserve. Here on LUXE BLOG, we remain committed to providing the insights you need to make solid decisions. Stay tuned for more updates, and as always, reach out if we want to learn more about the deals we're finding our clients. 

Also Read: Today We Take A Look At The Current Real Estate Landscape

Send Us A Message

Put Yourself On The A-List & Access The Keys
To Arizona’s Finest Properties

    Skip to content