A Spring Thaw for Housing?

Fed rate cuts could bring life to the weak real-estate market.

By SHARE

Economic professor and Econbrowser blogger James Hamilton thinks the Fed's big rate cuts this month could result in a stronger housing market in a couple of months:

My research paper went on to demonstrate that although interest rates respond immediately to the anticipation of any change from the Fed, it takes a considerable amount of time for this to show up in something like new home sales, due to the substantial time lags involved for most people's home-purchasing decisions.... According to the historical correlations, we would expect the biggest effects of the January interest rate cuts to show up in home sales this April.