Will Higher Interest Rates Affect the Housing Market?

house price increases  housingwire  creditAccording to what housingwire tells MHProNews, Motley Fool got opinions from three of their analysts abut the effect of rising interest rates, which the Federal Reserve will very likely raise in either the second or third quarter.

Matt Frankel says marginally higher interest rates will not impact the real estate market that significantly because, at least in the short term, mortgage payments will not be that much greater.

Jordan Wathen believes rising interest rates will reduce the amount of real estate on the market because it will be less attractive to move, and will prevent marginal homebuyers from entering the market. He also states household formation has been increasing since the Great Recession, and that will have the strongest impact on the real estate market. He does not think higher interest rates will affect that progression.

Dan Caplinger says the low interest rates have allowed homebuilders to purchase land inexpensively, giving them more opportunities for development. He says higher interest rates will make them more selective about building homes, and that could impact their share prices. ##

(Image credit: housingwire--house price increases)

matthew-silver-daily-business-news-mhpronews-com  Article submitted by Matthew J. Silver to Daily Business News-MHProNews.


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