The Federal Reserve is still raising its benchmark rates to cool inflation, but just how high can the Fed push rates without sending the U.S. economy into a recession? Experts are split about what the Fed still has up its sleeve, but one thing is for certain: the next several months of rate hikes—or declines—will directly impact the housing market.
After a summer slump with unseasonably slow home sales, experts are hoping for a soft landing, meaning a gradual improvement in affordability and more stability for the housing market as a whole by the close of 2023, Realtor.com reports.
In July, homeowners mostly opted to sit tight and ride out the tough market conditions rather than list their properties for sale. That meant house hunters had slimmer pickings to choose from—40,000 fewer homes across the U.S., according to the latest monthly data from Realtor.com.
“Sellers are still on the sidelines, locked in to lower interest rates with low expectations of rates improving significantly over the next year,” Realtor.com Chief Economist Danielle Hale notes in her report.
It all adds up to a housing market stuck in limbo, with would-be buyers and sellers watching and waiting, hoping things change in their favor.
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