Financial Times, August 2024
Realtor Mike McCann has helped Philadelphians buy and sell houses for close to four decades, but the current downturn in the property market is unlike any he has seen before. “Sales are down dramatically from a couple years ago,” he said. “The crazy thing is that in any other downturn in my 38 years, prices start to drop, drop, drop—but inventory is low. “People have frozen, they’re saying, ‘I’m not selling my house because I have a 2.6 per cent mortgage rate.’”
In an election marked by concern over America’s high cost of living, the country’s static housing market is a headwind for Democrats as they try to win the support of wavering voters. While the Federal Reserve is expected next month to begin cutting interest rates from their 23-year high, its two-year effort to beat back inflation has put home ownership further out of reach for many. In the most recent consumer price index report, the cost of housing-related expenses accounted for almost 90 per cent of the inflation recorded during July.
