An increase on rates from the Federal Reserve would not spell doom for the housing industry.
Diana Olick of CNBC wrote a Q&A explaining that home inventory, which has continued to fall and is now near record lows, is a greater issue. Low supply is causing prices to rise even more.
Olick writes that a Fed rate hike won’t necessarily cause mortgage rates to spike, and that mortgage rates will remain low even if an increase does occur.
Q: I heard somewhere that if the Fed hikes rates it could actually be a good thing for housing. Is that true?
A: In the big picture, yes. The Fed raises rates when it feels like the economy is strengthening, and a strong economy is good for housing. Income growth, job growth, consumer confidence — all of these help people buy homes.
Advertisement
Related Stories
Sales
Sales and Texting? Know the Rules
Texting your sales prospects en masse can be an efficient way to get your message through if you follow these best practices
Affordability
Will NAR's Landmark Commissions Settlement Lower Housing Costs?
The $418 million deal changes long-standing rules—written and unwritten—that consumers claim inflated sales commissions for home sellers, including new-home builders
Market Data + Trends
January's Mortgage Rate Dip Prompts Some Thawing of the Housing Market
A drop in mortgage rates from recent peaks nudged more homebuyers and sellers into the market, signaling the start of greater supply and demand