Mortgage Rates Rising

Apollo Chief Economist

When mortgage rates go up, home prices rise. This may sound counter-intuitive, but the logic is simply that when growth is strong and incomes go up, the housing market also tends to be strong, leading to a more hawkish Fed and higher rates.

The chart below shows that episodes with a positive correlation between rising rates and rising home prices typically last several years. For more see also our US housing outlook.

Chart showing that periods of rising interest rates is tied to rising home prices
Source: FRED, Apollo Chief Economist

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