JPMorgan Chase & Co. (JPM), Wells Fargo & Co (WFC): Banks May Suffer, but Rising Mortgage Rates Won’t Shake Housing

The National Association of Home Builders/Wells Fargo & Co (NYSE:WFC) Housing Market Index, which measures builders’ outlook for the next six-month period, rose six points this month, to 57 — which the group asserts is the highest level seen since the beginning of 2006.

Perhaps reflective of optimism in the broader real estate market is Realtor.com’s announcement that housing inventory increased to its highest point in June, to 1.9 million homes for sale, representing an increase of 4.3% over the past year.

Even Fannie Mae is chiming in. The agency’s Vice President of the Economic and Strategic Research Group wrote a commentary on Fannie’s website, using historical data to show how the current rise in interest rates will likely not derail the housing recovery.

Time will tell whether these harbingers of good tidings pan out, but, if they do, I think it will be the beginning of a true housing recovery. After all, a market dominated by distressed properties and overly tight credit regulations will never get the housing sector — and the greater economy — back on its feet. So, if it takes higher mortgage rates to get us there, I’m all for it.

The article Banks May Suffer, but Rising Mortgage Rates Won’t Shake Housing originally appeared on Fool.com and is written by Amanda Alix.

Fool contributor Amanda Alix has no position in any stocks mentioned. The Motley Fool recommends Wells Fargo and (NYSE:WFC) Zillow. The Motley Fool owns shares of JPMorgan Chase, Wells Fargo, and Zillow.

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