Ken McElroy Show

The Fed Changed the Rules Again! Here’s What It Means for Housing

10 snips
Dec 26, 2025
The discussion dives into the Fed's ongoing strategies, contrasting them with traditional quantitative easing. As mortgage rates fluctuate, the duo explores how Fed actions could boost housing demand and impact inflation metrics. They highlight the significance of local market dynamics and the emerging trend of parents buying homes for their children, shaping future homeownership. Insights on AI's influence on the job market and tactical advice for buyers and sellers round out a fascinating look at the evolving housing landscape.
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INSIGHT

Fed’s Balance Sheet Expansion Is QE In Practice

  • The Fed has stopped QT and begun buying Treasury bills, which functionally expands its balance sheet.
  • That balance-sheet expansion can push mortgage rates lower and re-accelerate housing demand.
ADVICE

Get Dry Powder Ready For A Potential Buying Window

  • Watch for the Fed’s bill purchases because they can lower mortgage rates and unlock housing demand.
  • Prepare dry powder now to act if rates and cap rates compress and buying opportunities appear.
INSIGHT

Housing Dominates CPI And Limits Inflation Risk

  • Housing (rent and owner's equivalent rent) is almost one-third of CPI, so soft rents mute headline inflation.
  • Flat or declining rents give the Fed cover to accept higher inflation while easing policy.
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