Let's wait for Friday.

Former President Donald Trump has once again directed sharp criticism at Federal Reserve Chairman Jerome Powell, accusing him of being the main culprit behind the continued weakness in the U.S. housing market. In a late-night post on Truth Social, Trump argued that Powell’s policies have made mortgages unaffordable and are undermining an already fragile real estate sector.
Trump wrote:
"Can someone please inform Jerome 'Too Late' Powell that he is severely undermining the housing industry? People cannot get mortgages because of him. There is no inflation, and all signs indicate that a significant rate cut is needed. 'Too Late' is a disaster!"
The remarks come as housing market data paints a complicated picture — with certain areas showing resilience, but overall affordability and confidence continuing to erode.
Builder Confidence at Two-Year Low
According to the latest data, U.S. housing starts rose 5.2% in the last month to an annual rate of 1.43 million units, the highest level in five months. However, most of the growth came from multi-family housing, while the single-family sector remains sluggish.
The National Association of Home Builders (NAHB)/Wells Fargo Confidence Index fell to 32 in August, its lowest reading since December 2022. Economists had expected a modest improvement to 34, underscoring the sector’s ongoing challenges.
NAHB Chairman Buddy Hughes noted that affordability is the central issue: “Buyers are waiting for mortgage rates to drop before they are ready to make a decision.” He added that the industry is also grappling with restrictive land regulations and complex administrative hurdles.
More than one-third of contractors have resorted to lowering prices, with average discounts around 5%. In addition, 66% of builders are offering incentives or promotions, the highest share since the pandemic. Yet buyer traffic remains weak, with many households postponing purchases due to still-elevated borrowing costs.
Regional Breakdown
Northeast: Builder confidence fell to its lowest point since January 2023.
South & Midwest: Confidence remained largely flat.
West: Slight improvement, though not enough to signal recovery.
Mortgage Rates Easing, But Not Enough
The average 30-year fixed mortgage rate dropped to 6.58% last week, its lowest since October 2023, and nearly half a percentage point lower since the start of the year. Still, the decline has not been sufficient to stimulate demand, as many buyers remain on the sidelines.
Robert Dietz, chief economist of NAHB, argued that the Fed needs to act: “With the weakening real estate market and various other economic data, the Fed should soon return to a rate-cutting cycle. This will reduce financial costs for housing construction and indirectly pull mortgage rates down.”
For now, Powell has resisted calls for aggressive easing, maintaining a cautious stance even as pressure mounts from both political figures and industry stakeholders.
Outlook: Bleak Data Ahead
The U.S. Census Bureau is set to release new housing starts and building permits data for July later this week. Analysts expect weak numbers, following June’s drop in single-family starts to an 11-month low and building permits falling to a two-year low.
If Powell delays rate cuts further, economists warn that the slowdown could deepen, putting additional strain on contractors, buyers, and the broader U.S. economy.
Conclusion
The clash between Trump and Powell underscores the growing political and economic tension surrounding U.S. monetary policy. While Trump insists that aggressive rate cuts are urgently needed, the Fed remains cautious, balancing concerns over inflation with pressure to support the struggling housing market. For now, signs suggest that recovery in the real estate sector remains fragile, with affordability and builder sentiment at their weakest levels in nearly two years.
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