Boston Fed President Collins said high interest rates could make buying and building homes more expensive in the short run. Her remarks were prepared for the Boston Fed’s annual economic conference, where she focused on the housing market.
Short-run pain, long-run gain
In the short run, high interest rates, which are sometimes necessary to cool the economy and keep inflation under control, can make buying and building homes more expensive. But in the long run, stable prices create favorable, predictable economic conditions for the housing sector, Collins said.
The Fed tightened monetary policy in September for the first time in three years. That was the first increase in three years, and it marked a turn after a long pause in its benchmark rate.
Rate outlook under pressure
The benchmark rate was held steady last month. After October inflation data came in above expectations, many policymakers signaled support for a rate hike in December.
Investors, per federal funds futures pricing, currently expect rate hikes in December and January, and a third hike in March or April. The US federal funds rate stood at 3.88 percent by our market data, as of 18:29 GMT on 14 November 2026, in force since 12 November.
Source: Federal Reserve | Data: FRED — St. Louis Fed
