Podcast: What Fed Rate Cut Means for Housing

On the latest episode of NAHB’s podcast, Housing Developments, CEO Jim Tobin and COO Paul Lopez discuss the latest economic news, including the Federal Reserve’s rate cut announcement this week, what it means for housing and what policymakers can do to promote growth in housing.

The Fed cut the federal funds rates by 50 basis points on Wednesday. Two more Federal Open Market Committee meetings remain in 2024, where additional cuts are expected as the Fed works toward its target rate of 2%.

Lower rates for AD&C loans are a critical next step in order for the housing industry to be able to meet demand. A drop in rates has also caused the refinancing market to heat up, and should help push prospective home buyers off the fence.

All of these are good signs for housing, as expressed in this week’s NAHB/Wells Fargo Housing Market Index, which rose two points this week, as builders look toward improvements in the market.

“The macroeconomy is starting to right itself,” Tobin observed. “So now is the time for lawmakers — whether at the federal level or state or local level — to jump on the housing bandwagon and get ready for that growth.”

Issues that policymakers should be looking toward to improve housing affordability include:

• Removing regulatory barriers to allow for more land development,
• Removing tariffs to make sure we’re bringing in affordable building materials, and
• Improving the construction labor market with immigration reform and workforce training.

“Everybody should be looking to enhance and protect the growth potential in housing over these next several months in order to prepare us for the next couple of years,” Tobin added.

In addition to the presidential elections, races to watch across the U.S. include the Senate races in Montana, Ohio, Pennsylvania, Nevada, Arizona, Florida and Texas.

“It’s just an interesting year,” Tobin noted. “And it’s going to be close.”

Tobin and Lopez will be heading to San Antonio Oct. 1-3 for the 2024 Fall Leadership Meeting, with nearly 1,000 attendees descending on the JW Marriott San Antonio Hill Country to network and discuss important issues in the industry and the election. Registration is also open for the 2025 International Builders’ Show in Las Vegas.

Listen to the full episode below, and subscribe to Housing Development through your favorite podcast provider or watch all the episodes on YouTube.