U.S. consumers are seeing home buying conditions at their worst in a generation as mortgage rates soar in response to the Federal Reserve’s aggressive tightening cycle.
About four in five consumers now describe buying conditions for homes as bad, a record in data going back to 1978, according to the University of Michigan’s consumer sentiment survey for November. The number of people who attribute the erosion in conditions to higher interest rates is at the highest level in 40 years, figures showed Friday.
The housing market, which is especially susceptible to higher borrowing costs, has been crumbling since the Fed began raising interest rates in an effort to curb demand across the economy and tame rampant inflation. Mortgage rates have been hovering around the highest levels in two decades, and as of last week were above 7%.
