Rising mortgage rates mean home buyers are spending considerably more: The typical mortgage payment in August was up 15.4 percent, or $118 a month, from a year earlier, even though home values gained just 6.5 percent in that same period.

When it does arrive, the next recession is unlikely to be triggered by the housing market. According to the panel of experts surveyed by Zillow earlier this year, the most likely trigger is monetary policy – which is where fears about rising interest rates come in.

In the big picture, rising mortgage rates may dampen demand for housing – existing home sales dropped 1.5 percent in August – and people may spend less on other items in order to afford homes. But rates are just catching up with a robust economy, and there’s no indication it will falter any time soon.

A combination of high home values and rising interest rates has sparked concerns that the housing market may be due for a slowdown. The current economic expansion is now the second longest in U.S. history. If it continues beyond July 2019 – and a recent survey of experts suggests it will – it will be the longest expansion in U.S. history.

When it does arrive, the next recession is unlikely to be triggered by the housing market. According to the panel of experts surveyed by Zillow earlier this year, the most likely trigger is monetary policy – which is where fears about rising interest rates come in. Rates have hovered at or just slightly above historic lows for much of the past decade; the last time American consumers had to grapple with a sustained rise in interest rates was during the first half of 2006.

Since the Federal Reserve began acting in 2015 to raise short-term interest rates again, long-term interest rates – including mortgage rates – have remained surprising low. They had withstood the Fed rate hikes through 2018 without moving much until this fall. Since the last Fed move on September 27, the average rate for a 30-year fixed-rate mortgage has climbed about 15 basis points to around 4.7 percent.

Some worry that rising rates will rapidly eat into mortgage affordability, limiting what home buyers can spend and putting the brakes on home value appreciation. Mortgage affordability is already stretched in some parts of the country, even with low mortgage rates.

Home values gained 6.5 percent in the year that ended in August, when the typical U.S. home was worth $216,700. The slowest home-value appreciation among major metros during that time was Washington, D.C., where the typical home rose 3.2 percent. Three metros – San Jose, Calif., Las Vegas and Atlanta – posted double-digit home value growth during that time.

However, rising mortgage rates mean that home buyers are spending considerably more: The typical mortgage payment in August was up 15.4 percent, or $118 a month, from a year earlier.

And that was before the latest Fed rate hike. If the recent pace of home value growth continued into September – September 2018 housing market data have not yet been released – the typical mortgage payment could have increased by as much as 21 percent from a year earlier.

While that poses an affordability problem for some home buyers, it is renters rather than homeowners – as broad groups – who have faced an affordability crunch. To afford the typical U.S. home, a household will spend just 17.5 percent of the median income – well below the 21.2 percent historical norm. By contrast, a renting household will spend 28.4 percent – and 36.8 percent in urban areas. Both are far above the 25.8 percent historical norm for renters.

In the big picture, rising mortgage rates may dampen demand for housing – existing home sales dropped 1.5 percent in August – and people may spend less on other items in order to afford homes. But rates are just catching up with a robust economy, and there’s no indication it will falter any time soon.