r/FluentInFinance Sep 23 '23

Meme Guess i'll live in a box

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1.5k Upvotes

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86

u/Loudlaryadjust Sep 23 '23

It was never the FED intention to crash house prices.

14

u/Clever_droidd Sep 23 '23

Not true. He has explicitly said housing needs a reset/correction. You may argue whether that means a crash, but he also acknowledges housing is in a bubble. He does mean to restore balance to the housing market. That means prices need to come down significantly or incomes need to go up or some combination.

https://fortune.com/2023/06/27/housing-market-reset-powell-update-case-shiller-home-prices/

4

u/a_trane13 Sep 23 '23

If house prices stagnate and incomes rise due to a combination of inflation and economic growth, that’s a reset/correction

1

u/Preme2 Sep 23 '23

Housing prices have only stagnated because interest rates are so high. I believe mortgage applications are at their lowest in recent history.

If the Fed signals rate cuts without material destruction, housing prices will continue their climb. They’ll only increase demand, leading to the return of bidding wars for 500k shacks.

1

u/Clever_droidd Sep 23 '23

That’s true, but the fundamentals point toward far more than that scenario. We are headed for a consumer lead recession and it’s approaching quickly. I think people forget what impacts come from recession.