Lower Rates Aren't A Cure For Housing
https://www.fastcompany.com/91422665/housing-market-mortgage-rate-zillow-itd-take-an-unrealistic-drop-to-restore-affordability
To paraphrase James Carville, “It’s the price, stupid.”
Too often in discourse about housing, interest rates get blamed as the main culprit. But Zillow’s recent analysis, as covered in Fast Company, suggests otherwise: to restore true affordability, mortgage rates would have to fall to 4.43% — a drop most economists consider unrealistic given the current economic landscape.
Even more telling: in high-cost metro areas (New York, L.A., San Francisco, Miami, San Jose, etc.), not even a 0% mortgage rate would make the median-priced home affordable for the median-income household, once you factor in taxes, insurance, maintenance, and other costs.
In other words: interest rates are a secondary factor. The primary barrier is the soaring cost of housing itself. Until this is addressed, hand wringing and clutching pearls while waiting for the Fed to lower rates is an exercise in futility.