The Federal Reserve doesn’t need to try to cool down the hot U.S. housing market with higher rates, even as home prices keep rising, CNBC’s Jim Cramer said Wednesday.
“I don’t want to repeat the mistakes that led to the financial crisis,” the “Mad Money” host said. “Unlike the lead-up to the great recession, homebuyers are actually solvent right now with excellent credit and strong stock portfolios.”
In the lead-up to the financial crisis, regulators failed to enforce lending standards as buyers became overleveraged on their purchases, Cramer said. The Fed then stepped in to cool down the market by jacking up the federal funds rate more than a dozen times.
But Cramer pointed out that lending standards are more stringent now, and low mortgage rates coupled with pandemic lockdowns spurred a frenzy in homebuying. Millennials have emerged as the largest cohort of buyers on the market after years of delaying homeownership for various reasons — including the…