US housing market poised to pop after Fed eases off on rates

U.S. consumers had a blue Christmas in 2018: Mortgage rates were the highest in seven years, the stock market was sliding, and prospective homebuyers worried that they couldn’t pay for the houses they wanted.

In the four months since, everything has changed, says Michelle Meyer, a U.S. economist with Charlotte, N.C.-based Bank of America. Home-loan rates have dropped to the lowest in more than a year and the three major U.S. stock indexes have rallied from 2018 lows after the Federal Reserve signaled a pause on interest-rate increases and the U.S. government ended the longest shutdown in its history.