Impact of Rising Mortgage Rates on Housing Prices

Mortgage rates have seen significant increases, counter to the Federal Reserve's rate cuts aimed at supporting the labor market. Since September 2022, the average mortgage rate rose from approximately 6.21% to over 6.86%, which suggests that the Fed's strategy may not be having the intended effects on the housing market. The increase in mortgage rates, particularly at the long end of the yield curve, raises concerns about housing affordability and the overall economy. If housing prices decline further, homeowners may be compelled to sell other assets, impacting both their financial stability and the broader market.