Impact of Interest Rates on Housing Market in Kenya: A Supply Side

Dr. Naftaly Mose and Joseph Kinuthia
Additional contact information
Dr. Naftaly Mose: Department of Economics, University of Eldoret
Joseph Kinuthia: University of Eldoret

African Journal of Commercial Studies, 2025, vol. 6, issue 5

Abstract: This study investigated the influence of lending interest rates on housing construction and homeownership in Kenya using time series data from 1979–2025. Econometric techniques including unit root tests, Granger causality tests, and the generalized method of moments (GMM) were applied. Results indicated that all variables were integrated of order one, I(1). Findings showed a significant negative relationship between lending interest rates and housing supply, suggesting that rising borrowing costs reduce housing investment and construction activities. The study recommends that policymakers consider regulating lending rates and strengthening financial oversight to promote affordable housing development in Kenya.

Keywords: Interest Rate; Housing Market; Construction Investment; Affordable Housing (search for similar items in EconPapers)
Date: 2025
References: View references in EconPapers View complete reference list from CitEc
Citations:

Downloads: (external link)
https://ijcsacademia.com/index.php/journal/article/view/345

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:cwk:ajocsk:2025-100

DOI: 10.59413/ajocs/v6.i5.7

Access Statistics for this article

More articles in African Journal of Commercial Studies from African Journal of Commercial Studies
Bibliographic data for series maintained by Dr. Charles G. Kamau ().