High mortgage rates have little to do with the Fed’s benchmark rate, the Fed chair said.
“We don’t set mortgage rates at the Fed. We set an overnight rate,” Powell said. The rates that go into mortgages are longer-term rates. “We do have an effect, but we’re not the main effect,” he said.
Instead, there are other things going on in the housing sector that are also affecting the affordability of housing, including the long-term housing shortage.“We haven’t built enough housing, this is not something the Fed can help with. That will be the case even after things normalize,” Powell said.