Powell says rate cuts won't make 'much of a difference' for struggling housing sector

Core Insights - The housing sector is facing ongoing challenges, with Federal Reserve Chair Jerome Powell indicating that interest rate cuts are unlikely to significantly improve inventory and affordability issues [1][2][5] - Powell emphasized that the primary issues affecting the housing market are low supply and high mortgage rates, which are not directly influenced by the Fed's monetary policy [5][9][13] Interest Rate Cuts - The Federal Reserve has cut the benchmark federal funds rate by 25 basis points for the third consecutive meeting, but Powell expressed skepticism about the effectiveness of these cuts in addressing housing market weaknesses [1][3][9] - The Fed's "dot plot" projections suggest only one additional rate cut in 2026, indicating a cautious approach moving forward [10] Housing Supply and Demand - Powell noted a long-standing shortage of housing supply in the U.S., stating that more diverse housing options are needed to meet demand [6][9] - Many homeowners are reluctant to sell due to having low-rate mortgages from the pandemic, which contributes to the ongoing supply constraints [5][13] Market Dynamics - The housing market has seen a significant increase in delistings, with a 38% rise in October compared to the previous year and a 45% increase in delistings for 2025 to date compared to 2024 [14][15] - Approximately 6% of listings have been removed from the market each month since June, marking 2025 as the year with the highest delisting rate since tracking began in 2022 [16]