onlinebaccaratrealmoney| Serious imbalance! Federal Reserve chairman says housing market problems are 'unsolvable'

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Recently, Federal Reserve Chairman Daley said publicly that there is a serious imbalance in the US housing market, which the Fed cannot solve. He also believes that the neutral interest rate is at 0.OnlinebaccaratrealmoneyBetween .5 and 1 is reasonable.

In December 2023, Daley also publicly said that, given the current economic situation, interest rate cuts in 2024 may be appropriate, detailing: "the US economy still faces uncertainties and risks, so three interest rate cuts may be needed in 2024."

Huatai Securities gives a data in its research report: in 2023, under the background of high mortgage interest rates, American residents' willingness to buy houses decreased significantly, and total home sales in the United States were 4.77 million units, down 16.6% from the same period last year. Negative growth for two consecutive years Existing home sales were weak, with only 4.1 million units sold for the year, down 19.3% from a year earlier, an increase of 2.3% from 2022 and the worst year since the data were recorded.

On the supply side, the total inventory of new and existing homes in the US was 1.453 million at the end of 2023, up 3 per cent from a year earlier and about 32 per cent of the peak since 2000.

Huatai Securities also mentioned that with regard to house-buying habits, we have found that the development trend of telecommuting among American residents has accelerated after the epidemic, and the development of telecommuting trend means that many people are no longer limited to workplaces. You can choose where to live according to your preferences and needs, which to a certain extent promotes population migration and stimulates the demand for housing purchase. For example, most of the enterprises that implement the telecommuting system belong to the high-tech industry, and these high-tech enterprises are usually located in cities with high cost of living, such as San Francisco, Los Angeles and so on. However, with the popularity of telecommuting, many employees choose to move to cities with lower cost of living.

Looking forward to 2024, Huatai Securities believes that under the assumption that the Fed will cut interest rates as scheduled and that the rate cut will not be lower than the consensus of the market, there will be two situations in the US housing market: the supply of existing homes may increase and boost the recovery of overall sales, and housing prices in some cities are expected to remain high in the context of low inventory.

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