U.S. Housing: The Impact of High Mortgage Rates

This podcast episode discusses the impact of rising mortgage rates on housing affordability and the potential consequences for the housing market. Mortgage rate increases may lead to a decrease in home sales and housing starts, but home prices could remain protected due to low mortgage rates for homeowners and a limited supply of homes for sale. In a scenario with sustained high mortgage rates, home sales may stabilize but prices could fall if inventory increases. Long-term mortgage rates may decrease due to a compression in the spread between treasury rates and spreads where originators sell mortgages to investors.