Mortgage rates are down with the Fed on deck. Will it help the struggling housing market?

Core Insights - The Federal Reserve is expected to implement its first interest rate cut in a year, with mortgage rates at an 11-month low, yet home sales remain at their lowest pace since 1995, indicating a complex housing market situation [2][4] - There is a significant pent-up demand in the housing market, but skepticism exists regarding the Fed's ability to meet market expectations for rapid rate cuts [2][3] - The balance of power between buyers and sellers has improved, although many sellers are reluctant to lower prices, and affordability remains a challenge for many Americans [3][5] Housing Market Conditions - The housing market is currently experiencing a supply of five months, the best summer inventory situation in nearly a decade, with some metro areas classified as buyers' markets [4] - Despite the favorable inventory situation, many sellers are unwilling to sell unless they receive their desired price, and low mortgage rates from the pandemic era deter many homeowners from moving [5] - Homeownership affordability is a significant issue, with average buyers needing to allocate 60% of their paycheck to cover all housing costs for a median-priced home [6] Renting vs. Buying - The current market conditions favor renting over buying, with an average cost difference of about $812 per month, marking the largest margin since the early 1980s [7] - Lower-income households face particularly challenging circumstances in the current housing market [7]