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Why Housing Has Been So Strong, but Might Not Be for Long
Abstract: The current monetary policy tightening cycle has seen the fastest increases in the fed funds rate in more than 40 years. While not all tightening cycles have led to significant increases in mortgage rates (e.g., the 1988, 2016, and 2004 cycles), this time around mortgage rates have increased by close to 400 basis points (bps) in the first seven months since lift off (see figure A1 in the appendix). In this Chicago Fed Letter, we describe how this increase has shaped (and is still shaping) the dynamics of the housing sector.
Keywords: Housing Starts; Home sales; construction;
JEL Classification: L74; R21; R31;
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Bibliographic Information
Provider: Federal Reserve Bank of Chicago
Part of Series: Chicago Fed Letter
Publication Date: 2023-10
Volume: no 485
Pages: 7