Robert Johnson, CFA, director of economic analysis with Morningstar, sounds a cautionary note about how rising interest rates could affect the housing recovery.

This week we spend most of our column on the housing industry, which has showed new signs of life. However, a review of the past six years of the recovery shows that even seemingly minor changes in mortgage rates have had major impacts on the housing sector, which in turn influences the GDP calculations. The effects work in both directions with just a few months of delay. Interest rates that have fallen sharply since January are likely driving the current boomlet in housing data. With Fed rate hikes back on the table, we are more than a bit worried about the housing industry, which seems as wed to cheap money as stock and bond markets.

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