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U.S. Housing Market Ready for Interest Hike, Economists Say

by Tom Walsh

Housing is well prepared for higher interest rates, according to a new survey

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The U.S. housing market is strong enough to stand up to an interest rate hike this year, according to a new Reuters report.

The report, which surveyed 22 top economists, found all but two state that the market could withstand the Federal Reserve’s rate hike due to a strong labor market and growing interests from Millennials for buying homes.

Matthew Pointon, an economist with Capital Economics, explained it this way: “The recent strength of housing activity suggests the market is well placed to cope with a gradual rise in interest rates. Rising rates will also be accompanied by an improving labor market and gradually loosening of credit conditions.”

In addition, economists stated that should rates increase to 5 percent, they would raise equity for homeowners and encourage them to put properties on the market, which will help alleviate the inventory problem facing many areas.

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