December 22, 2015
It is likely that home prices will decline as a result of the recent increase, and that could hurt the sales market, goes the prevailing argument.
But some mortgage industry optimists see a prospect for greater momentum in sales.
Who will be right? The answer could turn on whose assumptions about the direction of prices and wages, and the balance between the two, are correct.
Currently, improvements in home values are being driven by the low cost of mortgage financing. Those movements did not take into account the likelihood that the Federal Open Market Committee would raise short-term interest rates, said Rodney Ramcharan, research director with the USC Lusk Center for Real Estate.