After a four-day break, President Donald Trump returned with sharp remarks aimed at Federal Reserve Chairman Jerome Powell. In a post on the Truth Social media platform on Tuesday evening, Trump accused Powell of being the main cause of the weakening U.S. housing market.

Trump writes:

"Can someone inform Jerome 'Late Blooming' Powell that he is pushing the housing market into a deeper recession? People cannot borrow money to buy homes because of him. There is no inflation, and all signs indicate that significant interest rate cuts are needed. 'Late Blooming' is a disaster!"

These criticisms arise amid continued deterioration in real estate market data, while builder confidence is gradually decreasing.

Builder Confidence at Its Lowest Since 2022

According to the latest data, the number of housing starts in the U.S. last month increased by 5.2%, reaching an annual rate of 1.43 million units - the highest in five months. However, most of the growth came from multi-family housing projects, while the single-family housing segment remains sluggish.

The NAHB/Wells Fargo Housing Market Index dropped to 32 in August, the lowest since December 2022, contrary to economists' forecasts that the index would rise to 34.

NAHB Chairman Buddy Hughes stated: "The biggest issue right now is affordability. Buyers are waiting for mortgage rates to drop before they are willing to make a decision." He also emphasized that apart from interest rates, the construction industry is facing challenges from land regulations and complex administrative procedures.

In fact, more than one-third of contractors have had to lower prices, with an average reduction of about 5%. Meanwhile, 66% of companies are offering promotional packages - the highest rate since the pandemic. However, customer traffic remains sparse, as many potential buyers are still delaying due to high interest rates.

Regionally, builder confidence in the Northeast has fallen to its lowest level since January 2023. In the South and Midwest, the index has remained almost unchanged, while the West region has seen slight but insignificant improvement.

Mortgage Rates Decrease, Heavy Pressure on Jerome Powell

Last week, the 30-year fixed mortgage rate dropped to 6.58%, the lowest since October of last year, and decreased nearly 0.5 percentage points since the beginning of this year. However, this decline is still not enough to stimulate demand. Homebuyers are still waiting, while builders are facing increasing difficulties.

Robert Dietz, chief economist of NAHB, remarked: "With the housing market weakening and other economic data, the Fed will soon return to a cycle of interest rate cuts. This will lower financial costs for home construction and indirectly reduce mortgage rates."

However, the Fed under Powell's leadership has not taken any action. Investors and real estate developers are awaiting the next monetary policy meeting, with high hopes that interest rate cuts will be implemented soon.

Gloomy outlook for the upcoming housing data release

This week, the U.S. Census Bureau is expected to release July data on new housing starts and building permits. Experts predict that the numbers will not be bright. Previously, in June, the number of single-family housing starts fell to the lowest level in 11 months, while new building permits reached their lowest level in two years.

Observations suggest that if Powell continues to delay interest rate cuts, the stagnation in the real estate market will persist, putting significant pressure on contractors, buyers, and the entire U.S. economy.

👉 This article reflects the tension in monetary policy between President Trump and Fed Chairman Powell, as well as the challenging situation in the U.S. housing market, with recovery still very fragile.

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