Why Rising Interest Rates Will Hammer Housing

[midwayer]

Every eighth of a point rise in interest rates impacts buyers' open-to-buy by adding as much as $25 or more per month to the monthly payment, depending on loan type. Consumer debt has reached 110 percent of disposable personal incomes. Despite a pace of three million new jobs created by year's end, unemployment figures are flat at 5.6 percent, if down from last year's peak of 6.3 percent. But, that figure is still 1. 6 million less than the number of jobs lost since 2001. Further, many new jobs don't pay what previous jobs did, according to the Economic Policy Institute. And, a 2.2 percent gain in earnings this year holds little comfort to those paying 35 percent more for a gallon of gas or double the price for a carton of milk, and eight percent more for housing nationally

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