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On Wednesday, the Federal Reserve announced a quarter-point interest rate cut amid a concerning decline in the housing market. Notably, new housing starts dropped to a 1.3 million annual pace, falling short of economists’ expectations. This decline has prompted calls for more substantial rate cuts from experts, including investor Louis Navellier, who describes the current housing crisis as severe and worsening.
According to Visual Capitalist, the median U.S. home price is expected to reach approximately $416,900 in 2025, with a median household income of around $83,150, resulting in a price-to-income multiple of 5X compared to 3.5X in 1985. A shortage of housing has escalated to an all-time high of 4.7 million units as of July 2025, further complicating affordability for both young and older homeowners.
In response to these challenges, U.S. Treasury Secretary Scott Bessent indicated that the Trump administration is considering new measures to address high housing costs, potentially declaring a national housing emergency this fall. Proposed solutions may include incentives for first-time buyers and relief for builders, aiming to stimulate both supply and demand in the housing market.
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