Housing Experts Warn: Premature Fed Rate Cuts Could Send Home Prices Soaring 20% to $500K

The average US home price could increase by 20% to a record $500,000 if the Fed cuts interest rates too soon before getting inflation under control, according to housing expert Bill Pulte.

Home prices have already jumped over 30% in recent years due to factors like rising construction costs and low inventory. Cutting rates could further stimulate demand and price growth.

Higher mortgage rates so far have cooled demand and put homeownership out of reach for many buyers. Lower rates could unleash a "buying frenzy."

Inflation is still high at 3.5%, so housing would get even more expensive to build. More buyers chasing limited inventory could drive dramatic price hikes.

Other experts like Barbara Corcoran agree that even a small rate cut could send prices "through the roof" by 20% due to heavy purchase demand combined with constrained supply.