by Roger Valdez
Forbes
Like anyone in the housing discourse, I’ve done my share of prognosticating about mortgage rates and inflation and their impact on housing in general and housing policy specifically. It makes sense at the beginning of a new year to think about where rates may go in 2025, why, and what impact that will have on the housing economy.
Housing continues to be a huge share of the American economy, making up as much as 18% of Gross Domestic Product (GDP). That figure includes single-family home construction and multifamily construction but the associated services and economic production created by the housing economy. When changes happen in one part of the housing economy it has profound effects on other sectors as well. Changes in interest rates means a change in the cost to borrow which means shifts in demand.