Even some Federal Reserve officials are concerned the recent jump in mortgage rates could “crimp demand” for housing.
Overall, the Federal Open Market Committee members have an optimistic view when it comes to the recovery in the housing market.
The improvement in the housing sector is seen as “supporting the broader economy through related spending and employment, with rising real estate values boosting household wealth, confidence and access to credit,” according to minutes of the FOMC June 18-19 meeting released Wednesday afternoon.
FOMC participants generally are “optimistic that the recovery in the housing sector is sustainable, although a couple of participants were concerned that the run-up in mortgage rates in recent weeks might begin to crimp demand.”
An assessment of the housing market by Federal Reserve staff and economists noted that conditions in the housing sector generally improved since the May 1 FOMC meeting.
However, construction activity is “still at a relatively low level, and demand continued to be restrained by tight credit standards for mortgages,” according to the minutes released Wednesday.