Impact of Rising Interest Rates on Funding Costs and Housing Demand

「わが国経済においては、雇用・所得環境の改善や設備投資の増加傾向を背景に緩やかな回復基調を維持しましたが、物価上昇や資金調達コストの上昇、為替変動等の影響に留意が必要な状況が続きました。」

「In Japan, there has so far been no apparent decline in customers' willingness to purchase homes due to higher mortgage rates. The company has also been arranging fixed-rate financing for some time, so the impact at present is limited.」

「また、国内においても、労働力不足、物価上昇、資金調達コストの上昇、為替変動等への対応が引き続き求められる状況にあります。」

「In Japan as well, action is required to address labor shortages, rising prices, higher financing costs and foreign-exchange fluctuations, among other factors.」

「In Japan, a prolonged period of low interest rates is gradually giving way to a transition toward a world of positive interest rates.」

「Overseas, particularly in the United States, our main market, interest rates remain elevated. While closely monitoring interest-rate trends and real estate market conditions, we will seek to maximize rental income and focus on improving occupancy rates and profitability so that properties can be sold without delay when the market recovers.」

「In Japan as well, it is necessary to prepare for risks that could weigh on the economy, including surging energy and raw-material prices, rising interest rates and a downturn in the global economy.」

「Because the U.S. housing business had been performing well, we stepped up the pace somewhat, but the sharp rise in interest rates temporarily weakened the order environment, increased period-end inventory and, compounded by the impact of yen depreciation, expanded the balance sheet.」

「Overseas, primarily in the United States, we operate a detached-home business in the Smile Zone spanning 11 eastern, southern and western states where housing demand is expected to benefit from employment growth. Although potential demand, including among millennials and Generation Z consumers who are holding back from purchasing detached homes, remains high in the United States, repeated policy rate hikes could reduce consumers' willingness to purchase, and this impact continues to require close monitoring.」

「Although underlying demand for detached homes in the United States remains high, home sales have entered a declining trend due to continued increases in mortgage rates resulting from repeated policy rate hikes.」

「Regarding the future economic outlook for the North American housing market, we expect growth to continue over the long term because the market continues to maintain a high potential growth rate and employment remains at a high level. However, price trends and interest rate policy will continue to require close monitoring.」

「Interest rates are currently trending upward, and there are also risks such as surging material and labor costs.」

「Although we do not currently anticipate a risk of rising interest rates, we believe that the public hybrid bonds mentioned earlier (subordinated bonds) enabled us to raise funds at low interest rates that contributed to financial soundness, at a time before the spread of COVID-19 began to have an impact.」

「Rising market interest rates and interest rates resulting from a downgrade of the Company's credit rating could increase funding costs and adversely affect business performance and other aspects of operations. In addition, for customers who use financing to acquire land or buildings, rising market interest rates could increase the total amount payable and cause demand to decline.」