The Mortgage Market and Home Construction
Abstract
The purpose of this paper is to study the mortgage
market and its effect on the home construction industry. As
such, it is necessary to consider both the nature of the mortgage
market and the nature of the home building industry.
Throughout this paper it will become evident that the rate of
interest is of great importance. A change in the mortgage
interest rate has proven historically to produce an immediate
effect on the construction industry. For instance, a rise in
the interest rate of one percent is likely to reduce the number
of people who are willing to, or able to, undertake the higher
mortgage costs. Therefore, as fewer persons acquire new-mortgages,
the housing industry is bound to suffer, because new
home owners and builders are almost completely dependent on
the mortgage market for financing. If you are not a current K College student, faculty, or staff member, email dspace@kzoo.edu to request access to this SIP. Missing p. 49