Powell is keeping rates too high and keeping SFR sales low

[Elliott]

Ever wonder where SFR rates are currently in Europe?

AI: France: Mortgage rates have averaged around 3.5%–4.2% in mid-2025 for long-term fixed-rate loans, although 25-year loans tend to be priced near the upper end of this range. Rates in France are generally lower than in the UK for principal residences, especially for lower loan-to-value (LTV) ratios and well-qualified buyers. (This is based on recent mortgage market analysis and typical offers in major French high street banks; see inference note.)

England (UK): The average fixed mortgage rates are about 4%–5% as of July 2025, with some lenders offering slightly below 4% for shorter fixed terms at lower loan-to-value ratios. For a 25-year term (which is typical in England), expect rates close to these averages.

Germany: Interest rates for 25-year fixed mortgages are typically in the 3.8%–4.5% range, depending on the provider and LTV. Germany’s rates are somewhat similar to those in France, though slightly higher for longer fixed terms. (Based on German mortgage aggregator data and news commentary up to mid-2025.)

Bloomberg:
Sales of previously owned U.S. homes fell in June to a nine-month low as potential buyers continued to bristle at record prices and high borrowing costs. Contract closings decreased 2.7% in June to an annualized rate of 3.93 million, a report from the National Association of Realtors showed Wednesday. Economists surveyed by Bloomberg expected a 4 million sales rate.

The median sales price increased 2% in June from a year ago to $435,300. Home prices continue to rise even after a recent pickup in inventory.
“Multiple years of undersupply are driving the record high home price. Home construction continues to lag population growth,” Lawrence Yun, NAR chief economist, said in a statement. “High mortgage rates are causing home sales to remain stuck at cyclical lows.”

 

[Charles West]

The discount rate should be 3.25% based on the Fed's own metrics, yet tariffs continue to instill fear of inflation in the economists. Increasing the money supply by 25% didn't bother them, but a temporary tariff scares the chit out of them. It doesn't get weirder than that.

 

[J Grant]

I can not speak for the RE markets in Europe. Here in America, prices rose too high and are finally softening to some semblance of MV but are still beyond reach of many buyers, IDK if Erupse has the problems we have in America of sky high homeowner insurance and high property taxes that combine to make owning un affordable. THAT should be worked on , not lowering rates to put owners underwater again on mortgages of over valued properties because low rates inevitably rise again.
That is the danger of artificially stimulating prices with low rates.
European nations are also not saddled with trillions in debt and deficit, they can afford an bailout, I don't think we can afford another one.

 

[J Grant]

Keeping sale prices low - what a joke. Sale prices are still too high comparirtve to the income of people and inflation would increase with lower rates as well.

Maybe instead of spending hundreds of billions and more on detention centers and a golden dome, the $ could be spent to shore up a national insurance fund to see lower home insurance rates. Sme areas can not even get insurance anymore. Climate change is real, even if the neanderthal in the WH denies it. The reality is the increase in storms and floods, and these occurrences are costing billions in clean-up each time, and many local folks lose homes and equity since they laced a few hundred $ FEMA flood policy. A fund to support Americans able to buy flood insurance instead of building a Golden Dome? The whiner in chief is whining about Powell and rates to juice up prices again instead of doing something about the problems that are putting home ownership at risk.

 

[Non Sequitur]

The median sales price increased 2% in June from a year ago to $435,300. Home prices continue to rise even after a recent pickup in inventory.
“Multiple years of undersupply are driving the record high home price. Home construction continues to lag population growth,” Lawrence Yun, NAR chief economist, said in a statement. “High mortgage rates are causing home sales to remain stuck at cyclical lows.”

Yun is wrong again. Current interest rates aren’t the problem. The median US income is $75k and that doesn’t math up with median US housing cost. Truth is we’re paying the price for past rates that were to low for to long resulting in a housing market that can’t self correct. But NAR will never state that housing costs were inflated by bad policy, they just blame the lack of inventory which is nonsense.

 

[Joe Flacco]

It sucks for us, but there isn't a problem with the rates or the housing market. Both are working properly.

 

[Charles West]

Yun is wrong again. Current interest rates aren’t the problem. The median US income is $75k and that doesn’t math up with median US housing cost. Truth is we’re paying the price for past rates that were to low for to long resulting in a housing market that can’t self correct. But NAR will never state that housing costs were inflated by bad policy, they just blame the lack of inventory which is nonsense.

You nailed it, incomes aren't high enough to handle historically normal interest rates in the current depreciated money environment. This shouldn't surprise as wages prior to Trump have declined over the last three decades but nobody up till now has done anything about it.

 

[CGinMN]

It sucks for us, but there isn't a problem with the rates or the housing market. Both are working properly.

Agree, separate the housing market from the mortgage market and the RE sales market and it makes sense. The mortgage market and RE sales market really want lower rates because it increases transactions. But when NAR says people are locked into their homes or when they talk about affordability that’s BS. What they mean is they want more transactions.

 

[Joe Flacco]

Agree, separate the housing market from the mortgage market and the RE sales market and it makes sense. The mortgage market and RE sales market really want lower rates because it increases transactions. But when NAR says people are locked into their homes or when they talk about affordability that’s BS. What they mean is they want more transactions.

Yup. I can't stand Yun or Diana Olick either. They just spew typical realtor spin all the time.

 

[Fernando]

MSN

Trump floats 'no tax on capital gains' for home sales. Here's who could benefit​

President Donald Trump said the administration is considering ending capital gains taxes on home sales to boost the housing market.

When asked about the idea in the Oval Office on Tuesday, Trump told reporters, "we're thinking about that."

"If the Fed would lower the [interest] rates, we wouldn't even have to do that," he said. "But we are thinking about no tax on capital gains on houses."

NICE! NO CAPITAL GAINS ON HOUSES.
WHERE DO I MOVE?