Housing under pressure
The housing market, a sensitive part of the economy to rising interest rates, is showing signs of deterioration as major central banks continue to implement rate hikes to tackle heightened inflationary pressures. In the US, mortgage rates have seen levels above 7% and the monthly mortgage payments now exceed US$2,000, the highest in 20 years. Along with elevated food and gasoline prices, high mortgage rates create stress for households, making the Fed’s job harder in engineering a soft landing, fueling volatility in markets. We expect rates to trend higher as core inflation remains sticky and central banks continue tightening their stance until H2 2023. The housing market will continue to come under pressure as rates remain elevated for some time. Towards the end of 2023, if central banks succeed on bringing inflation down, we expect upward pressures on mortgage rates to ease.
Lale Akoner, Senior Investment Strategist, Global Economics and Investment Analysis team, BNY Mellon Investment Management
Please note the content on this website is for Investment Professionals only and should be shared responsibly. No other persons should rely on the information contained within this website.
Investment Managers are appointed by BNY Mellon Investment Management EMEA Limited (BNYMIM EMEA), BNY Mellon Fund Managers Limited (BNYMFM), BNY Mellon Fund Management (Luxembourg) S.A. (BNY MFML) or affiliated fund operating companies to undertake portfolio management activities in relation to contracts for products and services entered into by clients with BNYMIM EMEA, BNY MFML or the BNY Mellon funds.
Subscribe to updates
1196750 Exp: 07 December 2023