[Congressional Bills 104th Congress]
[From the U.S. Government Publishing Office]
[H. Res. 98 Introduced in House (IH)]

  1st Session
H. RES. 98

Expressing the sense of the House of Representatives on rising interest 
             rates and the impact on the housing industry.


_______________________________________________________________________


                    IN THE HOUSE OF REPRESENTATIVES

                           February 24, 1995

Mr. Wynn submitted the following resolution; which was referred to the 
              Committee on Banking and Financial Services

_______________________________________________________________________

                               RESOLUTION


 
Expressing the sense of the House of Representatives on rising interest 
             rates and the impact on the housing industry.

Whereas the Board of Governors of the Federal Reserve System and the Federal 
        Open Market Committee has increased short-term interest rates 7 times in 
        the 12-month period preceding the date of the introduction of this 
        resolution, leading to an increase of two points in long-term interest 
        rates;
Whereas during 1994, interest rates for conventional 30-year, fixed-rate 
        mortgages jumped from 7 percent in January 1994 to 9\1/4\ percent in 
        December 1994 and this increase for conventional, fixed-rate mortgages 
        translates into an additional monthly payment of $140 on a $100,000 
        mortgage;
Whereas the housing industry is the single most interest rate sensitive sector 
        of the economy;
Whereas interest rate hikes have already had an impact on 1994 housing starts as 
        sales of new homes fell during the last 2 consecutive months of such 
        year;
Whereas housing economists project 1.09 million starts for single-family homes 
        in 1995, a decline of about 8 percent from 1994;
Whereas the National Association of Home Builders projects that a 1 percentage 
        point increase in mortgage rates renders 4,000,000 potential home buyers 
        ineligible to buy median-priced homes under today's standard mortgage 
        underwriting criteria;
Whereas the House of Representatives is concerned about future interest rate 
        increases even though the availability of adjustable rate mortgages has 
        somewhat mitigated the impact of previous interest rate increases;
Whereas any additional interest rate increase will severely inhibit adjustable 
        rate mortgages from providing support to the mortgage market in 1995; 
        and
Whereas there is normally a lag of between 6 to 9 months from the time the Board 
        of Governors of the Federal Reserve System and the Federal Open Market 
        Committee increase interest rates to the time the increase actually 
        begins to slow the economy: Now, therefore, be it
    Resolved, That it is the sense of the House of Representatives 
that--
            (1) the Board of Governors of the Federal Reserve System 
        and the Federal Open Market Committee should act cautiously 
        when considering any other interest rate hike; and
            (2) such Board or Committee should carefully weigh the 
        effects of past interest rate increases, and consider that the 
        economy may not have had time to fully absorb the effects of 
        these increases, before acting to increase rates in the future.
                                 <all>