The article discusses recent comments by Fed President Waller regarding potential rate cuts, addressing concerns about high mortgage rates and their impact on homebuilders. Historically, high rates have preceded layoffs and recessions, raising alarms among some Fed members. While current GDP and retail sales are strong, a new executive order from Trump aims to reduce regulations on builders, possibly alleviating costs. This could enhance builders' flexibility in pricing and construction, leading to a more favorable housing market outlook amid mixed economic signals.
I believe some Fed members are concerned about mortgage rates rising above 7% again, although not everyone shares this view.
This marks a contrast to 2022 and 2023 when it appeared the Fed was less concerned about rising mortgage rates.
The announcement states that regulations account for 25% of the cost of a home.
The builders aren't the March Of Dimes and some of their recent positive confidence growth has been on the anticipation of less regulation.
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