The Impact of Higher Interest Rates on the Mortgage Market

Working Paper

The Impact of Higher Interest Rates on the Mortgage Market

August 11, 2017

Abstract

Over the past 35 years, we have witnessed a tremendous secular decline in interest rates. Mortgage rates peaked at over 18 percent in 1981 and were down to 3.54 percent by the Fall of 2016. Rates have now begun to rise and, while it is not clear how high they will go, it is clear that the secular decline in rates is over. This paper identifies and examines six impacts on the mortgage market due to the end of the secular decline in interest rates.

Centers

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