Dive Brief:
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The housing market is strong enough to survive a spike in interest rates, the National Association of Realtors’ chief economist wrote in Wednesday’s edition of Realtor magazine.
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Earlier this month, Lawrence Yun predicted that mortgage interest rates will rise to almost 5% in 2015 and sneak up to 6% the following year.
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In the article, Yun acknowledged that higher interest rates could stop some consumers from buying homes, but he said few homeowners will put off moving just because their existing mortgage has a lower interest rate than a new one will. “Even as rates move up, life moves on,” he wrote.
Dive Insight:
It’s widely held among housing experts that enough pent-up demand exists among homeowners and would-be first-time buyers that it will eventually have a substantial, positive impact on home sales.
Yun, like economists from other housing organizations, points to job creation, consumer confidence, and an expected easing of credit standards to offset the inevitable increase in interest rates.