National University System Institute for Policy Research




(858) 642-8498 Get Started

EconoMeter: Will higher mortgage rates weaken housing market?

Roger Showley, SAN DIEGO UNION-TRIBUNE

Friday, December 2, 2016

View Article

 

Four townhomes under construction in Point Loma.

 

Kelly Cunningham, National University System

YES: Higher borrowing costs will further hinder first-time purchasers as rising home prices are already worsening affordability and excluding buyers in many markets. Government outlays will go up as the cost of servicing the enormous national debt skyrockets. The Federal Reserve will be forced to monetize government debt by buying up high-yielding bonds, and higher long-term interest rates will have devastating effects on the housing market as homeowners struggle to pay rising monthly mortgage payments.