Federal Reserve Chair Jerome Powell warned that the housing market’s problems aren’t going away anytime soon, saying recent interest rate cuts are unlikely to improve affordability or ease the tight supply of homes meaningfully.
Powell made the comments during a press conference on Wednesday after Fed officials voted to cut the benchmark federal funds rate by 25 basis points for the third straight meeting. In his opening remarks, he said that “activity in the housing sector remains weak.”
During the Q&A session, Powell was asked directly about the housing market’s ongoing struggles and whether lower rates could help make homes more affordable—especially for younger buyers and first-time homeowners.
“The housing market faces some really significant challenges,” Powell said. “And I don’t know that, you know, a 25-basis-point decline in the federal funds rate is going to make much of a difference for people.”
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Federal Reserve Chair Jerome Powell speaks at a press conference
Federal Reserve Chairman Jerome Powell said housing market challenges are likely to persist despite rate cuts. (Chip Somodevilla/Getty Images)
“Housing supply is low,” Powell added. “Many people have very, very low-rate mortgages from the pandemic period, and they kept refinancing… so it’s expensive for them to move, and we’re a ways away from that changing.”
Powell emphasized that the biggest pressure on housing comes from a lack of supply—something the Fed can’t fix with monetary policy alone.
“We haven’t built enough housing in the country for a long time,” Powell said. “A lot of estimates suggest that we just need more housing of different kinds.”
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A California home listed for sale
High home prices, low inventory, and elevated mortgage rates continue to weigh on housing activity. (Loren Elliott/Bloomberg via Getty Images)
“Housing is going to be a problem,” Powell continued. “And really, the tools to address it—we can raise and lower interest rates, but we don’t really have the tools to address, you know, a secular housing shortage, a structural housing shortage.”
Even after three rate cuts in 2025 totaling 75 basis points, the housing market has yet to show meaningful improvement. Additional rate relief may also be limited. The Fed’s latest Summary of Economic Projections—often referred to as the “dot plot”—points to just one interest rate cut in 2026.
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A worker builds a home under construction in California
Years of underbuilding have worsened housing affordability, Powell said. (David Paul Morris/Bloomberg/Getty Images)
The housing sector continues to struggle under tight inventory, which has pushed prices higher. Mortgage rates—while influenced by the Fed—are not directly tied to the federal funds rate and remain elevated, further squeezing affordability for buyers.
These conditions have led many sellers to pull listings off the market. Realtor.com’s latest monthly housing trends report shows delistings jumped 38% in October compared with the same month last year. So far in 2025, delistings are up roughly 45% compared with the same period in 2024.
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Since June, about 6% of listings have been removed from the market each month, making 2025 the year with the highest delisting rate since Realtor.com began tracking the data in 2022.
