Source: Boston —
Federal Reserve Chair Jerome Powell warned that the US housing market is likely to suffer a reversal in the wake of policymakers’ interest-rate hikes.
“We’ve had a time of a red-hot housing market all over the country,” Powell said in a press conference after the Fed’s policy decision Wednesday, in which the central bank raised interest rates by another 75 basis points.
“The deceleration in housing prices that we’re seeing should help bring prices more in line with rents and other housing-market fundamentals. And that’s a good thing,” Powell said.
US mortgage rates have climbed to the highest level since 2008 in response to the Fed’s monetary tightening, with average 30-year fixed-rate home loans reaching 6.25% last week. While home-price gains remain high on a year-over-year basis, they have been decelerating.
