Will mortgage rules and rates stall housing recovery?

New mortgage rules and rising mortgage rates may soon trip up the housing recovery, Daniel Indiviglio of Reuters Breakingviews reports.

Home prices have skyrocketed in the last year, and the Fed’s tapering of its stimulus program may send mortgage rates up, scaring off potential buyers who need to finance a home purchase.

Meanwhile, the “qualified mortgage” rule — which outlines more conservative underwriting standards lenders must employ in order to qualify for legal safe harbor protections from lawsuits — will be implemented early next year.

Cash purchases from investors could still provide enough demand to prevent home prices from sliding. Source: Breakingviews