High Mortgage Rates Pose Threat to U.S. Housing Market

(28 October 2022) Following policy rate hikes by Federal Reserve, mortgage rates have quickly risen this year more than doubling in just 10 months. The increase in mortgage rates can potentially have an essential negative impact on such important sector of economy as housing. Housing market, when estimated as combination of construction, repair and maintenance in construction, utilities, housing sales and furniture manufacturing, accounts for more than 15% of U.S. GDP.

However the impact on economy can be even larger. Building new houses requires homebuilders, architects, construction workers, inspectors and suppliers for building materials, realtors and financial services, furniture, lawn equipment.