Surge in mortgage rates begins to strain recovery

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The surge in mortgage interest rates that began in May on indications that the Fed might begin to wind down its bond-buying program by the end of the year is now beginning to take its toll on the housing recovery, The Wall Street Journal reported.

New-home sales in July fell at their fastest monthly rate in three years due to increased rates, helping to push down construction company stocks when the data was released on Friday, according to WSJ.

Also a bad sign for the recovery, the largest owner of single-family homes, American Homes 4 Rent, recently ordered a round of layoffs after it reported a quarterly loss, WSJ said.

Source: The Wall Street Journal