The Impact on Housing of Higher Mortgage Rates

History suggests sales and house price growth will slow

With the ten-year Treasury yield above 2.0% this morning, and mortgage rates nearing 4%, a key economic question is: What will be the impact on housing of higher mortgage rates?

First, housing is a key transmission channel of Federal Reserve policy. I discussed this back in 2012: Analysis: I expect QE3 on Sept 13th [2012]

[O]ne of the key transmission …