Housing market needs ‘difficult correction’ to balance out, Fed says. In Utah, it’s already happening

The Federal Reserve raised its benchmark interest rate by another 0.75% on Wednesday as part of its fight against inflation, and the Fed's chairman, Jerome Powell, predicted.

the housing market in the United States will likely experience a "difficult correction" before achieving "better balance."

We can already see it, though. The rise in home prices, which has been more pronounced in certain areas than others, is beginning to level down.

Powell told reporters on Wednesday that the slowdown in house prices "could assist bring sort of prices more nearly in line with rents and other housing market fundamentals." "And that's good," she added.

In the long run, Powell added, we need supply and demand to be better balanced in order for housing costs to rise at a reasonable rate and at an acceptable level and for people to once again be able to purchase homes.

Therefore, a drop in the property market is likely necessary for us to return to that point.

From a sort of business cycle perspective, Powell continued, "This challenging correction should bring the housing market back into better equilibrium."

More clarity was provided by Powell's words on Wednesday regarding what he meant in June when he stated that the housing market need a "reset."