Last week, Federal Reserve Chair Jerome Powell finally elaborated on how its desire to combat inflation might help halt the housing boom, Fortune reported

Powell was quoted as saying that buyers need “a bit of a reset.” 

“We need to get back to a place where supply and demand are back together and where inflation is down low again, and mortgage rates are low again,” he reportedly said.

While Powell hopes that rising rates will help stop the market surge, the supply issue remains a challenge, the article said—to get back to a “normal” market, according to Logan Mohtashami, lead analyst at HousingWire, inventory would need to reach 1.52 million to 1.93 million housing units.

The article noted Powell’s caution about suggesting home prices will fall, quoting him as saying that “it’s still a very tight market, and prices might keep going up for a while, even in a world where rates are up. So it’s a complicated situation.” 

Moody’s Analytics chief economist Mark Zandi told Fortune recently that he expects year-over-year home price growth to decline from 20.6% to 0%, and in significantly “overvalued” housing markets, he expects 5% to 10% home price declines. 

If a recession does come, Moody’s Analytics said it expects a 5% decline in U.S. home prices and a 15% to 20% decline in significantly “overvalued” housing markets.

And finally, Powell said he wants to see mortgage rates on the decline again. However, the article suggests it will take a while. Inflation is still at 8.6%, and the Fed wants to see it at 2%. At last week’s briefing, according to Fortune, the Fed made it clear that could be well into 2024.

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