What effects will a cooling housing market have on the economy?

Amy Scott Nov 8, 2018
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Different methods of calculating consumer inflation have different ways of accounting for the movement of home prices. Stephen Brashear/Getty Images for Redfin

What effects will a cooling housing market have on the economy?

Amy Scott Nov 8, 2018
Different methods of calculating consumer inflation have different ways of accounting for the movement of home prices. Stephen Brashear/Getty Images for Redfin
HTML EMBED:
COPY

The Federal Reserve has been raising short-term interest rates, but long-term borrowing costs have been rising, too. Freddie Mac said Thursday the average rate on a 30-year fixed-rate mortgage rose to 4.94 percent, a nearly seven-year high. Those higher costs are taking a bite out of demand. For example, mortgage applications fell to a four-year low last week. And home sales and price increases have been slowing. Ten years ago, a housing collapse contributed to a deep recession. A decade on, what could a housing slowdown mean for the overall economy?

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