What effects will a cooling housing market have on the economy?

The Federal Reserve has been raising short-term interest rates, but long-term borrowing costs have been rising, too. Freddie Mac said Thursday the average rate on a 30-year fixed-rate mortgage rose to 4.94 percent, a nearly seven-year high. Those higher costs are taking a bite out of demand. For example, mortgage applications fell to a four-year low last week. And home sales and price increases have been slowing. Ten years ago, a housing collapse contributed to a deep recession. A decade on, what could a housing slowdown mean for the overall economy?

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