US housing remains stuck as inflation proves stubborn

The FT Unhedged column argues that the US housing market is still the economy’s weak spot: existing home sales dropped 8.4% in January as affordability remains the dominant hurdle, with price gains of roughly 20% during the pandemic not fully offset by wages and ongoing high mortgage costs. Policy ideas like limiting institutional investors or boosting mortgage-backed securities are viewed as unlikely to meaningfully move prices. Meanwhile, inflation remains persistent rather than decelerating, implying few near-term rate cuts and continued policy caution.