The author is a Reuters Breakingviews columnist. The opinions expressed are his own.

By Gabriel Rubin

WASHINGTON, June 9 (Reuters Breakingviews) - It's another nightmare for companies that trade on the American dream. High U.S. mortgage rates are depressing the market for the fourth consecutive spring homebuying season. The interest rate on the average 30-year fixed-rate loan has shot up to nearly 6.6% from about 6% since the attacks on Iran in February. Consumer confidence is suffering, too, a double whammy for a variety of manufacturers and shopkeepers.

Sales of everything from refrigerators to rugs will be feeling the effects. Purchases of items such as appliances, furniture and cabinetry tend to roughly double for consumers who buy new residences, or in the range of $6,000 to $8,000 on average, according to Federal Reserve research. While repairs and remodeling fill some of the gap during housing downturns, a robust real estate trade is far more important, as explained by UBS analyst John Lovallo.

Carrier CARR.N boss David Gitlin reminded investors earlier this year that mortgage rates higher than 6% were “challenging” for the $60 billion heating, ventilation and air conditioner company he runs. Whirlpool, WHR.N whose laundry and cooking appliances are on many homebuyers' shopping lists, warned last month that demand fell by 10% in March, a decline not seen since the 2008 financial crisis and a bad omen for all sorts of big-ticket items. The entire home furnishings category is “bumping along the bottom,” noted Niraj Shah, CEO of online retailer Wayfair W.N.

U.S. home sales dropped after the Fed started raising interest rates in 2022 to combat the surge in post-pandemic inflation. Existing home sales have totaled about 4 million a year since 2023, compared to more than 6 million in 2021, when borrowing costs were at a recent low.

Vendors of durable goods can comfort themselves in the idea that eventually pent-up demand should stage a comeback. High housing prices and a supply shortage of an estimated 4 million homes is a trend aching to be broken. Berkshire Hathaway just agreed to buy developer and builder Taylor Morrison Homes for $6.8 billion, an encouraging sign of confidence for a rebound.

Mortgage rates needn't return to an ultra-low 3% to kickstart the U.S. housing market either. Simply dipping below 6% triggered sales and refinancing activity in the brief periods when it has occurred. It suggests that buyers have adjusted, at least partly, to a new economic reality. What would help is more stability, which would open the door wide for washing machines and couches.

Follow Gabriel Rubin on Bluesky and LinkedIn.

CONTEXT NEWS

The average 30-year fixed-rate U.S. mortgage increased 9 basis points to 6.65% for the week ended May 22, the highest rate since August 2025, the Mortgage Bankers Association said on May 27. Such housing loans came with interest rates of about 6% before U.S. and Israeli attacks on Iran began in February.