Housing Market Can Withstand an Increased Federal Interest Rate

January 7, 2016

Despite the link between the two, the Federal Reserve’s interest rate hike isn’t the cause of the recent decrease in mortgage applications.

Housing Wire broke down a report from Capital Economics and said that the original December forecast said that the housing market could survive rising rates. The late December holidays skewed some of the results a bit.

“It is tempting to ascribe that collapse to the decision by the Fed to increase interest rates for the first time in nine years at their December meeting. After all, there is a tight relationship between mortgage interest rates and refinance activity,” Matthew Pointon, property economist with Capital Economics, said in the article.

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