According to Standard & Poor’s (S&P), rising mortgage rates will only be a “mild deterrent” to home purchase activity in 2019. A “mild deterrent” — that must be an advanced degree in economics way of putting it.

Why, as the rest of us may ask, are rising interest rates not going to be a big deal?

According to S&P, even though we are likely to see rising interest rates, a moderation in home price growth, increases in wages, and millennials aging and coming to the market will offset the impact of rising rates. (More college professor talk.)

Basically, in simple terms, for 2019 we are looking at a market where sellers start to realize their homes are only worth what people can actually pay. That’s paired with the fact that millennials don’t want to be paying off a 30-year mortgage well into retirement. Not great reasons for sustaining volume, but we’ll take it for the short term.

Better news for the longer term: Redfin recently reported that with rates going up, builders might change course and start building more affordable homes that are easier to sell. Those efforts might take some cooperation from local governments, but the need for affordable homes to meet household formation will likely get those governments to make needed concessions. Costs of construction need to come down to make starter homes profitable for builders. With labor and material costs rising, those costs associated with land acquisition (minimum lot sizes), and meeting building code requirements will need to come down if starter home construction is to become attractive to builders. Good reasons to represent the industry at the next zoning board meeting.

Getting back to that “mild deterrent” that interest rate hikes might be in 2019. By the end of the year, most of those with the advanced degrees in “news making” are predicting interest rates for a 30-year mortgage will be close to 5.5%. That sounds horrific compared to today’s rates, and rates remaining under 5.25% is a real possibility for 2019. For those at their budget limits, a 5.25% rate compared to today’s rates could cost them about $20K in buying power on a typical home. That is real money when it comes to making an offer. For those with some room in the budget, going from today’s rates to 5.25% will cost a potential homebuyer about $100 a month on a $250K loan. Any projected rate increase is a great incentive for anyone considering a home purchase to act now, but not necessarily tragic for those who have some room in the budget and can wait.