Student debt is already weighing heavily on the housing market, and interest rates poised to hit 6% could throttle the already precarious situation the economy is in now. To be sure, the falling 30-year mortgage rate could reverse and hit 6% in the second half of next year. With record numbers of Americans in a record amount of debt, the slightest increase in interest rates could push some over the edge. But that's only one concern about the housing market.
There is no better barometer on the health of the United States' economy than housing, according to Market Watch. It's an industry that encompasses a myriad of vital sectors; including banking, manufacturing, commodities, international trade, transportation, and, of course, consumer spending. So it's not surprising the Federal Reserve closely monitors housing trends in the course of setting monetary policy. It's simply not possible to have a solid economic foundation without a robust housing market, and last year, the housing market was anything but robust.