<div>Editor’s note: This column was included in the Sept. 26 version of The Pulse, a weekly BankBeat newsletter sent to subscribers.In coverage of last week’s surprise 50-basis-point cut to the Fed Funds rate, some of Chair Powell’s remarks caught my eye. Asked about the impact of rate cuts on mortgages and the housing market, Powell responded that, while lower rates would probably shake some movement loose in the housing market, it’s not the key problem.“The real issue with housing is that we have had and are on track to continue to have not enough housing,” he said. “All of the aspects of housing are more and more difficult, and you know, where are we going to get the supply? And this is not something that the Fed can really fix.”That jibes with what I heard at an economic forecast webinar we hosted earlier this year. There’s been a gap of 2 million homes in the market since 2008, according to Eric Kelley, chief investment officer at UMB Bank in Kansas City. That gap isn’t shrinking at current rates of construction compared to the number of new households the country has been adding.Lower rates might help the cost of new development, but a lot of other things also have to go right in order for us to make a dent in that shortage. It’s certainly a topic of deep interest to me and other millennials and Gen Z folks. I’ve spent a lot of time contemplating what kind of budgeting and saving I’ll have to do if I want to achieve the homeownership element of the American dream.I’ve been intrigued by one possible solution to this problem. It’s not a silver bullet, but some municipalities are changing zoning laws to ease construction of townhomes, accessory dwelling units or other less traditional housing. It’s something I’m keeping my eye on.The shortage of housing isn’t just an urban or suburban concern either. In rural areas, it’s already hard to find qualified workers in many industries, and attracting workers to move to your area without adequate housing is a fool’s errand. In our October issue, we profile a Kansas banker who’s trying to honor her family’s legacy of community investment by increasing her town’s housing options. She’s working to pull together funding to renovate a historic hotel in the town of Hutchinson (pop. 39,699) to include apartments and ground-level retail space.And one of our Rising Stars in Banking this year is also tackling the problem of increasing his Nebraska town’s housing stock through the investment club which he helped found.It’s a multifaceted problem which will require multifaceted solutions, and community bankers are stepping up to do their part.</div>

Mountain View, CA

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Rate cut impacts on the housing market

Editor’s note: This column was included in the Sept. 26 version of The Pulse, a weekly BankBeat newsletter sent to subscribers. In coverage of last week’s surprise 50-basis-point cut to the Fed Funds rate, some of Chair Powell’s remarks caught my eye. Asked about the impact of rate cuts on mortgages and the housing market, Powell responded that, while lower rates would probably shake some movement loose in the housing market, it’s not the key problem.