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What is the impact on new housing investment if there is an increase in real interest...

What is the impact on new housing investment if there is an increase in real interest rates?

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if there is increase in real interest rates the it affect the new housing investment. when central bank increaes interest rate in the market to control the inflation then sum of nominal interest rate and inflation rate become real interest rate. this real interest rate is high enough to control the inflation in the economy and aggregate demand too. when real interest rate increase then it affect housing demand too and people who are interested to acquire home they now postpone their demnad. demand for new housing investment reduced as increase in real interest rate.

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