Not only did the Federal Reserve hold the fed funds rate unchanged at its current 2.25-2.50% range at the Tuesday and Wednesday meeting of its Open Markets Committee (FOMC), but it announced there would probably be no rate hikes at all this year.

In its post-meeting statement, the Fed cited slowing economic growth, particularly in household spending and business investment and lowered its forecast for economic growth in 2019 to 2.1%. It had predicted 2.3% growth as recently as December. Data released after the meeting shows that most members of the Committee now expect no rate hikes at all this year, one in 2020, and none again in 2021. Again, a sharp contrast with December when they were predicting two increases this year and one in 2020.

While the Fed's move usually impacts short term rates, the New York Timesreported the 10-year Treasury note, the issue most closely tied to mortgage rates, dropped sharply after the Fed announcement. The resulting yield, 2.54%, was the lowest since January 2018.

Fed Chairman Jerome H. Powell said he still expects the economy to grow at a solid pace, but since September it has been slowing somewhat more than expected.

Standing Up to Slowing Down

Even before the Fed announcement, CoreLogic's Ralph Mclaughlin wrote that mediocre construction reports, slowing price increases, disappointing home sales, and an aging economic cycle may be making homeowners and buyers fear that the roof of the housing market might cave in. Not so, he said, at least not pricewise, and provided several reasons why housing still has a bright future--maybe 20 years or more of it.

First, housing prices usually fare well even when the overall economy sours. They held up well in three of the last five recessions, dipping slightly by 1.9% in the 1991 recession and then, of course, plunging in 2008.

Second, we are in a very different supply environment, with record low inventories, only 15.7 available new and existing units per 1,000 homes, than what existed before the onset of the Great Recession when there was a massive run-up in inventory. This means that prices are unlikely to fall far, if at all, should there be a recession.

Add to that the huge backload of non-homeowning young Americans, which presents the potential for 32 million new households to be formed over the next 20 years. Consequently, a lot of housing units will be needed which, Mclaughlin says, should continue to put upward pressure on the housing market until at least 2040.