Please ensure Javascript is enabled for purposes of website accessibility

Housing under pressure

The housing market, a sensitive part of the economy to rising interest rates, is showing signs of deterioration as major central banks continue to implement rate hikes to tackle heightened inflationary pressures. In the US, mortgage rates have seen levels above 7% and the monthly mortgage payments now exceed $2,000, highest in 20 years. Along with elevated food and gasoline prices, high mortgage rates create stress for households, making the Fed’s job harder in engineering a soft landing, fueling volatility in markets. We expect rates to trend higher as core inflation remains sticky and central banks continue tightening stance until H2 2023. The housing market will continue to come under pressure as rates remain elevated for some time. Towards the end of 2023, if central banks succeed on bringing inflation down, we expect upward pressures on mortgage rates to ease.

Lale Akoner, Senior Investment Strategist, Global Economics and Investment Analysis team, BNY Mellon Investment Management


All investments involve some level of risk, including loss of principal. Certain investments have specific or unique risks. No investment strategy or risk-management technique can guarantee results or eliminate risk in any market environment.

This material has been provided for informational purposes only and should not be construed as investment advice or a recommendation of any particular investment product, strategy, investment manager or account arrangement, and should not serve as a primary basis for investment decisions. Prospective investors should consult a legal, tax or financial professional in order to determine whether any investment product, strategy or service is appropriate for their particular circumstances. Views expressed are those of the author stated and do not reflect views of other managers or the firm overall. Views are current as of the date of this publication and subject to change. This information may contain projections or other forward-looking statements regarding future events, targets or expectations, and is only current as of the date indicated. There is no assurance that such events or expectations will be achieved, and actual results may be significantly different from that shown here. The information is based on current market conditions, which will fluctuate and may be superseded by subsequent market events or for other reasons. References to specific securities, asset classes and financial markets are for illustrative purposes only and are not intended to be and should not be interpreted as recommendations. Information contained herein has been obtained from sources believed to be reliable, but not guaranteed. No part of this material may be reproduced in any form, or referred to in any other publication, without express written permission.

Recent market risks include pandemic risks related to COVID-19. The effects of COVID-19 have contributed to increased volatility in global markets and will likely affect certain countries, companies, industries and market sectors more dramatically than others.

BNY Mellon Investment Management is one of the world’s leading investment management organizations, encompassing BNY Mellon’s affiliated investment management firms and global distribution companies. BNY Mellon is the corporate brand of The Bank of New York Mellon Corporation and may also be used as a generic term to reference the Corporation as a whole or its various subsidiaries generally.

Not FDIC-Insured | No Bank Guarantee | May Lose Value

©2022 BNY Mellon Securities Corporation, distributor, 240 Greenwich St., New York, NY 10286.