Skip to main content

Higher rates will leave homes overvalued

Our new, higher interest rate forecast suggests that mortgage rates will climb to an eight-year high in 2023, making house prices look expensive by historical standards. But the overvaluation won’t be as extreme as it was on the eve of the financial crisis, or indeed before any previous substantial fall in house prices. As a result, our base case remains that house prices will stagnate rather than collapse in 2023.

Subscriber content

Read this in full, free

Start a free trial and use one of your 10 free starter credits to unlock this piece.


Free. 10 articles. No card required.

By completing this form you are agreeing to our Terms and Conditions for the provision of a free trial of Capital Economics' services. We take your privacy seriously and will not share your details with others without your consent. By providing your details, including your email address, you are consenting to Capital Economics sending you macroeconomic commentary and analysis. You can unsubscribe at any time. See our Privacy Policy for more information.