"Powell Warns of Long-Running Housing and Commercial Real Estate Challenges"

Federal Reserve Chair Jerome Powell testified that the housing market is facing a deep-seated supply shortage, with 3.5 to 5.5 million housing units needed. He emphasized that interest rate cuts alone won't solve the long-running inventory crisis, as the shortage stems from cautious post-financial crisis construction. Powell highlighted factors such as low mortgage rates locking in homeowners and restrictive zoning laws limiting new construction. While markets expect rate cuts, Powell cautioned that they won't address the housing market's fundamental supply issues, and balancing rate adjustments is crucial to avoid threatening the broader economy.