My colleauge Mark Greene give great insight in his latest Forbes Column, The Definitive Housing Market and Interest Rate Forecast for 2017
Here’s the takeaway: JFK said “a rising tide lifts all boats” and all signs point to a rising tide.
Interest rates have been engineered below market equilibrium forces for over a decade. US economic growth has been suppressed and anemic for so long that we have organically accepted mediocrity as a new norm. The financial markets immediately responded to promised tax and regulatory reforms anticipating accelerated economic growth. Economic growth breeds inflation and rising interest rates is simply part of those mechanics.
The math is simple; more people with jobs and a more robust economy means more people will be buying and selling homes in a higher interest rate environment.