Will Rising Interest Rates Crash the Housing Market? Nope! Here’s Why.

Will higher interest rates crash the US housing market? Interest rates have risen sharply in the last few weeks as the federal reserve has raised interest rates. There is concern that these higher rates for home loans will crash the housing market. We have analyzed every time in the last 40 years what has happened when home mortgage rates have risen and at no time did the housing market crash solely based on rising interest rates.

Historically, as interest rates have risen more than 1.5% for more than a year, home values have also increased without a housing market crash. Actually every single time home mortgage interest rates have risen home prices have increased. One of the reasons is that rates have risen because the economy was chugging along and economists wanted to slow it down, so the Federal Reserve raised interest rates.

Also, interest rates went up during inflationary times, so since there was inflation home prices were going up as well.

There is very little evidence that this current round of inflation will cause the housing market to collapse or crash.

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