Fed in No Rush to Cut Rates
In a widely anticipated announcement, the Federal Reserve paused on rate cuts at the conclusion of its January meeting, holding the federal funds rate in the 4.25% to 4.5% range. The Fed will continue to reduce its balance sheet, including holdings of mortgage-backed securities.
The Fed noted the economy remains solid, while specifying a data-dependent pause. Fed Chair Jerome Powell did qualify current policy as “meaningfully restrictive,” but the central bank appears to be in no hurry to enact additional rate cuts.
Given the ongoing, outsized impact that shelter inflation is having on overall inflation, an explicit mention to housing market conditions would have been useful. However, Powell did state in his press conference that housing market activity appears to have “stabilized.”
Although improving, shelter inflation is running at an elevated 4.6% annual growth rate, well above the Consumer Price Index (CPI). These housing costs are driven by continuing cost challenges for builders such as financing costs and regulatory burdens, and other factors on the demand-side of the market like rising insurance costs.
NAHB Chief Economist Robert Dietz offers more insights from the Fed's January meeting in this Eye On Housing article.
Additionally, the latest Macro Economic Outlook from NAHB provides further details about the pace of housing inflation, as well as a recap of 2024 economic conditions, a forecast for 2025 interest rates, and more. Watch the video below or visit the Macro Economic Outlook video library on nahb.org.
Latest from NAHBNow
ConstructionSkillsMap.org, a new nationwide tool funded by the National Housing Endowment, makes it easier to find skilled trades training opportunities in communities across the country.
The newly released 2025 National Green Building Standard (NGBS) provides many options for building more sustainably. NGBS Green Certification provides independent, third-party verification for a home, building, or land development. For those who wish to provide even more value for their clients, NGBS Green+ certifications recognize NGBS Green homes that go “above and beyond” in one or more areas of sustainability. Here are the seven certification options.
Latest Economic News
Existing home sales continued to slow in July as record-high home prices and elevated mortgage rates weighed on buyers. Mortgage rates resumed an upward trend after the ceasefire ended in early July.
Demand for all types of residential mortgages was weaker, while lending standards for most were essentially unchanged in the second quarter of 2026, according to the recent release of the Senior Loan Officer Opinion Survey (SLOOS).
Wage growth for residential building workers continued to lose momentum in the second quarter of 2026, reflecting softer housing construction activity and weaker labor demand. According to the latest data from the U.S. Bureau of Labor Statistics, both nominal and inflation-adjusted wages have weakened further, extending the cooling trend that emerged after the strong wage gains of the post-pandemic period.