Continued debates and questions about the health of the US consumer. Falling rates revive demand for new one family houses. Since 2013 is the correlation very close between falling long term mortgage rates and demand for new houses. This clearly shows, how rates can directly influence purchasing decisions especially for long-term goods. Fed decision yesterday to extensively communicate that the rates will be on hold for the foreseeable future can clearly add to the housing demand in coming months. Low and stable rates can clearly support US consumer thus providing new impulses to the economy.

US New Family House Sold Annual Total and 30 year US government bond yield (here shown inverse)


Source: Bloomberg, US Census Bureau