When the Federal Reserve set out to cool the economy and slow inflation in the past, it counted on the housing market to do much of the work. By raising interest rates, the central bank made mortgages more expensive and trimmed the number of buyers.
This time, America’s red-hot housing market threatens to make the Fed’s job tougher. With so many buyers competing for so few available properties, home prices in the U.S. rose 18.8% last year, according to a home-price index maintained by S&P Dow Jones Indices and CoreLogic that measures average home prices in major metropolitan areas.
