US Mortgage Rates Rise Again: What It Means for the Housing Market

Average mortgage rates in the United States rose over the past week, according to national aggregators. The rise in rates is occurring against a backdrop of persistent inflation and a cautious stance from the Federal Reserve, which is in no hurry to cut its benchmark rate. For the housing market, this means a further reduction in the number of potential buyers and a slowdown in new construction volumes. Shares of major mortgage lenders and homebuilding companies are sensitive to such changes. Investors holding real estate sector securities in their portfolios should consider that a prolonged period of high rates could lead to price corrections in several key US housing markets.