Federal Reserve benchmark raise could cool housing market

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If the policy is enacted, slower home-price appreciation will result.

 

September 28, 2015

Houses in Seattle's Pigeon Point neighborhood. The city could see a slow down in home-price appreciation if the Federal Reserve raises benchmark interest rates. Photo: Joe Mabel/Wikimedia Commons.

The Federal Reserve is considering raising benchmark interest rates later this year. Hot housing markets, like San Francisco, Seattle, and Denver, are taking note.

Zillow, via the Wall Street Journal, reports that the raises could slow down home-price appreciation in the more popular markets.

San Francisco, for example, had a median home value of $764,600 in August, which was up 12 percent from a year earlier and was four times the national median value. Acceleration won’t continue with raised rates.

A federal rate increase will put pressure on the mortgage rates of more expensive (upwards from $750,000) homes, too.

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