Rising mortgage rates won't hit housing : Experts

 Rise in repo rates and mortgage rates are less likely to impact on residential sales of the country, says stock brokerages.  Higher rates in mortgage to have less impact in India when compared to that in the US market, said Kotak Institutional Equities (KIE) . Indian market to see a slight impact on the sales of housing mortgage , given the moderate increase in equated monthly installments (EMIs) from higher mortgage rates and negligible defaults.  Rise in repo rate had a similar subsequent increase in rate to mortgage rate by 90 basis point. Repo rates to peak at 5.75 per cent with home loans at around 8.5 per cent and EMIs by 15 per cent vs 2021-22 levels. we see two mitigating factor 1. salaried individuals will get increment of 5-7 per cent , with domestic inflation averaging around 5-6 per cent, which will improve EMI/Income ratio. with domestic inflation average around 5-6 per cent , which improve EMI/ Income ratio.  2. a new house  buyer  can increase the tenure of the loan , to keep EMIs stable.

KIE says that the low base of the housing market might mitigate the impact of a possible slow down in the housing demand. Some recovery over the past years was observed, with aggregate 5 major markets increasing 23 per cent ,  over those in FY22. The Indian housing market was weak during 2011-12 through 2018-19 , with a volume compound annual growth rate of minus 4 per cent and average home prices in US were higher than when compared to India. and hence new launches have been weak and inventories manageable. Motilal Oswal Research  said - A rising interest-rate environment , companies will see an impact once mortgage rates cross 8-8.5 per cent.