This Thursday's Federal Reserve interest-rate decision may mark the end of a seven-year era of incredibly low mortgage rates and the corresponding high affordability in housing.
The potential move away from a zero interest-rate policy is, for short-term rates, a harbinger of higher mortgage rates ahead and the beginning of the end of this seven-year era of incredibly low mortgage rates and corresponding high affordability.
Forecasts for mortgage rates vary, but indicate a potential increase of 50 basis points (half a percentage point) over the next 12 months. My analysis of loan-level data from Optimal Blue, an enterprise lending- services platform, for the first half of this year demonstrates the impact of such a rate hike on potential buyers.