Student Loan Debt to Blame for Sluggish Housing Market, Says Fed

However, builder confidence rebounded as the index went up to 58 in January compared to the 56 reading in December. Furthermore, the central bank has been sounding increasingly dovish as of late, which could mean that less rate hikes than anticipated for 2019–something that could help give the sector a much-needed boost.

Rising in conjunction with mortgage rates are home prices, putting prospective buyers out of reach. The latest data from the National Association of Realtors showed that the Quarterly Housing Affordability Index has been dropping thanks to a rise in median home prices.

However, it appears that prices are beginning to soften. Home prices in the month of November logged a 5.1 percent annual gain, which represents its smallest increase since August 2015.

In the meantime, rental prices for single-family homes increased 2.9 percent annually in November 2018, which is up from the 2.8 percent annual growth compared to a year ago.

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