National, Central Coast home prices staying high
WASHINGTON, D.C – Don’t expect relief from sky high home prices on the Central Coast – or across the nation.
That was one message delivered by Federal Reserve Chair Jerome Powell who spoke to a conference of business journalists on April 4. Powell said the Fed was taking a “wait and see” approach to the dramatic increase in tariffs by the Trump Administration and he said other than watching, the it was too soon to tell if the nascent trade war will spike inflation or cause a recession.
But he did say that national, state and regional shortages of housing won’t ease anytime soon.
“There’s going to be upward pressure on housing for a long time,” he said in response to a question.
He cited the shortfall in housing construction since the Great Recession as one cause. The fact that homeowners who “locked in low interest rates” during the pandemic have no incentive to move is a second factor though that will ease over time, he added.
Finally, he said the costs of “materials and labor in the new built market” are likely to rise with tariffs and the Trump Administration crackdown on immigration, making housing more expensive.
Although he didn’t single out California or the Central Coast specifically, they remain some of the least affordable marketing in the country because of both the cost of housing and the relatively few households that earn enough to support a family and a mortgage at current interest rates.
Powell repeated the Fed view that the U.S. has a “solid economy” with “uncertainty weighing on people” over the ultimate impact of the April 3 tariffs that were much higher than expected.
He said the administration is in the process of formulating new policies on trade, immigration, fiscal policy and regulation and it will be months before the longer term impacts in those areas are clearer.
–Editor Henry Dubroff is attending the annual SABEW conference in Washington, D.C.
