Why Interest Rate Cuts Won’t Fix a Global Housing Affordability Crisis

Published On Aug 30, 2024, 5:04 AM

Central bankers globally are lowering interest rates to combat high inflation, but this change is unlikely to fully resolve the ongoing crisis in housing affordability. Many families, even those with stable incomes, are finding it increasingly difficult to purchase homes due to high mortgage rates and limited housing supply. The Federal Reserve and other central banks have begun to decrease borrowing costs, which is leading to slightly reduced mortgage rates; however, these rates are not expected to return to the low levels seen in the past, likely settling between 5.5% and 6% in the U.S. This will continue to make homeownership a challenge for many, especially in competitive markets.