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Industry & Trends

Don’t Mess with the Fed

New research from an industry consulting group says the Federal Reserve is going to do what it does.

Anyone in the building supply business who is hoping for some imminent relief in interest rates that might rekindle housing construction should probably hope for something more realistic – like winning the lottery or meeting Santa Claus.

That’s the forecast from industry resource John Burns Research and Consulting in a recent presentation at the Pro Builders Summit. Matt Saunders, senior vice president of building products research for JBREC, and John Beard, director of building products research, in a report on the meeting, made it a point to emphasize that the Federal Reserve Board, which sets rates that determine mortgages, will not start to take its foot off the interest-rate gas until inflation stabilizes at 2 percent. Right now it is just under 4 percent and while that’s down from the 8.5 percent peak last year it’s still too high for any reverse actions.

The presentation also addressed other areas of the building trade from a dealer survey JBREC conducted:

  • It was the supply chain meltdown that really caused all of this inflation, not wars or energy costs. 
  • About one-half of all prospective home buyers are priced out of the market because of high mortgage rates. 
  • With housing prices climbing they found home builders using less expensive materials, building smaller homes, and adjusting the mix of homes they were building to keep costs down. 
  • They do see pent-up demand in future years when mortgage rates come down. 

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International Woodworking Fair
Tuesday–Friday
August 6–9, 2024

Tuesday–Thursday
8:30 AM–5:00 PM*
Friday
8:30 AM–2:00 PM*

*Building A opens 7:30 AM Tue-Fri

Georgia World Congress Center
285 Andrew Young International Blvd
Atlanta, GA 30313

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