Interest Rates Rising, But Not Enough To Curtail Housing Sales

Aaron Johnson

Monday, June 10th, 2013

or those potential homeowners, it is still a good time to buy.  If you subscribe to econprofaj, you will gain access to articles such as this one, written by Nick Timiroas of Wall Street Journal’s Real Time Economics.  Even though interest rates rose over 4% for the first time in a decade, that is still historically a very low interest rate.  Goldman Sachs economists stated that “Rising rates ‘will likely slow the strong house price appreciation observed over the last year, but the impact will likely be modest given the cushion provided by the high level of housing affordability at present.’”

It should also be pointed out that stagnant wages and underperforming labor market are also potential barriers to sustained improvement in the housing market.  Even though consumer balance sheets have improved, there are still issues of finding credit worthy borrowers to take advantage of low housing prices.

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