Can the Housing Market Survive More Fed Rate Hikes?

Policymakers at the Federal Reserve are set to vote this week on interest rate policy, and markets are anticipating that they will raise rates for the first time in three years.Fed Chairman Kevin Warsh and the other members of the Federal Open Market Committee will cast their votes on Wednesday, and a rate increase seems likely following a string of reports showing strong hiring and elevated inflation.It would mark the first Fed rate hike since 2023, when the central bank concluded a rapid tightening cycle to address the worst inflation in decades. After several rounds of cuts in 2024 and 2025, the overnight rate sits at a current range of 3.50% to 3.75%.That hasn't been enough to keep recent inflation in check, with energy prices soaring this year as a result of disruption in global oil flows from the Iran war. But interest rates have been high enough to depress the housing market, which has now suffered through three straight years of weak sales.Warsh admitted as much in his recent keynote address at the Fed's annual symposium in Jackson Hole, WY, saying that the housing market is "showing strains" despite the overall resilience of the economy. So, a new round of rate hikes raise...