Rising mortgage rates have done the expected: They've lowered housing production.
According to the California Building Industry Assn., the state's new-housing permits fell 16.6% to 226,800 in May from April's 272,100. This year's May figure is down 24.9% from last year's 301,900.
Higher rates seem to have had the most impact on the first-time buyer, said J. A. Farina, the association's president. He added that buyers reacted immediately to the sudden rise in rates, but then traffic and sales stabilized indicating that the key may be stable rates.