Decreasing supply is a far greater concern to the housing economy
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.