On the other hand, housing industry experts also argue that higher rates reflect an improving economy and wage growth, which could also help the housing market in the long run. Still, some market observers are worried that the rising mortgage rates could dissuade borrowers to move into new homes.
SEE MORE: Hone in on Homebuilders ETFs
“The median price of an existing and new home reached new highs in June this year – respectively at $247,600 and $321,600. As of September, prices are down 5.7 percent and 2.6 percent respectively from those highs,” notes Hedgopia. “Prices have managed to rise to fresh records, but not sales.
In September, sales of existing and new homes rose 3.2 percent and 3.1 percent m/m to a seasonally adjusted annual rate of 593,000 and 5.47 million. They were both down from recent cycle highs – 629,000 in July this year and 5.57 million in June, in that order.”
For more information on the housing market, visit our homebuilders category.
iShares U.S. Home Construction ETF