房贷利率飙升 美国新建住宅销量下降

English version

What happened

US sales of new single-family homes fell slightly by 0.6% in September, as builders' price cuts and promotions failed to offset a surge in mortgage rates.

The economics

Higher mortgage rates raise the financing cost of buying a home, shifting housing demand left and lowering sales; this shows how interest rates, a monetary policy tool, transmit through credit and housing markets to aggregate demand. Builders' price cuts and promotions are price and non-price measures that only partly cushion the fall in demand.

Figures to quote

• sales down 0.6%

Evaluation

Rates are not the only factor: incomes, price expectations and housing supply also affect sales, and the effect of rate rises comes with a lag, so a small short-run fall need not signal a trend.

Practice question

Using this example, explain how a rise in interest rates affects aggregate demand through the housing market, and evaluate the limits of monetary policy in fighting inflation.