US Housing Slows as Higher Borrowing Costs Weigh on September Data

what happened

According to Market Talk, high mortgage rates have held back demand in the US housing market. September readings on pending home sales, builder sentiment and housing starts all came in weak.

Yardeni Research says higher Treasury yields add to the squeeze by raising financing costs for both buyers and builders. Oxford Economics agrees that borrowing costs are clearly slowing housing, but notes activity was already subdued, so the slowdown is unlikely to significantly hit the wider economy. The firm also points to family assistance as a growing route into homeownership.

why it matters

Housing is sensitive to interest rates, so weak data alongside rising yields keeps investors focused on Treasuries and the Federal Reserve's policy path. Analysts see limited spillover to overall growth, so attention is likely to stay on rates rather than on a broader slump.

market impact

US homebuilders: weak demand and starts pressure the sector as borrowing costs rise

• ▼US homebuilder stocks pressure down — weak pending sales, builder sentiment and starts reduce sector prospects

tags

instruments