The central bank created major distortions in a market where many Americans have most of their wealth. Why?
With interest rates now hovering around 5%, existing-home sales are down more than 14% from last year. Some potential buyers are sitting on the sidelines until rates or prices or both decline, while sellers are hoping the market picks up again so they can get a higher price.
But don’t count on rates falling to those pandemic lows. They were the result of extraordinary market manipulation from the Fed.
Allison Schrager is a senior fellow at the Manhattan Institute and a contributing editor of City Journal.
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