The hidden US crisis that alarms Powell

While US economic resilience is being praised, there is a "hidden" crisis in the world's leading power which has alarmed Powell of the Fed himself.
The US real estate market, in fact, has a problem.
According to various estimates, the country lacks between 3.5 and 5.5 million housing units.
The roots of the shortage date back to the aftermath of the global financial crisis, when cautious developers hesitated to invest in new real estate and set a precedent of deficits that continue to this day.
The Federal Reserve chairman, testifying before the Senate Banking Committee on Thursday, March 7, highlighted the real estate sector.
The potential rate cuts have given investors hope of much-needed relief for the industry, which has struggled to cope with soaring mortgage and refinance rates.
However, Powell testified that the real problems in the housing market are much deeper and that it will take much more than simple monetary policy intervention to fix them.
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Powell's fears The real estate market is in a very difficult situation at the moment: Powell said so.
The problems associated with low-rate mortgages and high [mortgage] rates and everything in between will reduce as the economy and rates normalize, he explained, referring to the current imbalance among the 90% of homeowners with mortgage rates below 6% and the current market offering above 7%.
“But we will still end up with a nationwide housing market where there is a housing shortage,” he added.
Powell alerted to the current problems facing home buyers and sellers: “There is a shortage of homes available for sale because many people live in homes with a very low mortgage rate and can't afford to refinance, so they don't they transfer." This means there is a historically low supply of existing regular housing units for sale and a very low transaction rate.
This actually drives up the prices of other existing homes, and even new homes, because there simply isn't enough supply.
The scenario is less than heartening for Powell: There's a lot of things happening…
because of the higher rates, and the short-term ones are weighing on the housing market…
it's harder [for builders] to get people [labor] and materials.
But as [mortgage] rates come down, and all of that impacts the economy, we're still going to end up in a place where we don't have enough housing.
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“According to NAHB estimates, real estate activity represents nearly 16% of GDP,” a group of real estate trade organizations wrote in a letter to Powell last fall.
“We urge the Fed to take these simple steps to ensure that this sector does not crash into the hard landing that the Fed has so sought to avoid.”