The U.S. central bank raised its key lending rate Wednesday by a quarter of a percent, only the second time it has done so since the end of the financial crisis. Economists say normalizing or raising the record low interest rates of the past few years is a sign the U.S. economy is on the mend. However, others say higher rates could also hurt the very industry that triggered the financial crisis. The subprime crisis Many homeowners were forced into foreclosure in 2008 as a result of high-risk loans and borrowing practices. Millions found themselves "underwater," paying higher interest rates on mortgages that were worth more than the value of their homes. Since then, most home prices have climbed back to pre-recession highs. For the average homeowner, that means their home is now worth about the same as it was in 2006 before the housing market collapsed in 2008. But just barely. Lawrence Yun, the chief economist at the National Association of Realtors, told VOA it's a critical time in the housing sector. "The housing market is clearly getting healthier, so we need to allow this momentum to continue to build," Yun said. Home prices rising In the last six years, home prices have risen faster than incomes. Yun says that's an unsustainable trend which could hurt affordability. Adding to buyers’ woes, interest rates on 30-year mortgages have risen sharply since last month. "Mortgage rates had been at 3.5 percent for most of 2016,” Yun said. “It has already increased above 4 percent, partly in anticipation of the Federal Reserve rate changes." Hikes could discourage buyers With economists predicting three more rate hikes next year, experts say mortgage rates are likely to go higher. Just a quarter percent increase could add as much as $50 per month on a $300,000 mortgage, according to personal finance website Finder.com. The website's chief economist, Michelle Hutchison, says a recent survey conducted by Finder.com shows the prospect of higher rates could turn off a lot of potential homebuyers. "Our survey found that 60 percent of those people who are intending to buy in the next five years will hold off if there is a rate rise this month,” Hutchison said. “That equals over 81 million people." On the other hand, Hutchison told VOA, higher rates could reduce competition in some regional markets and provide higher rates of returns for those saving for their down payments in savings and bond markets. "Buying a home is still the safest, lowest-risk investment you can make," she said. End of an era Despite the direct correlation between rising rates and lower demand for housing, Yun says homebuyers need to accept that the era of ultra-low interest rates is over. But, he says higher employment, rising wages and more flexible lending by banks should help balance the equation. "Mortgage default rates are running very low, which means there is an opportunity [for banks] to expand the credit box [loosen up credit and lending criteria], which could neutralize rising interest rates,” Yun said. “The bottom line impact, I believe, is that rates are increasing but not alarmingly. Combined with job creation and possibly some opening up in the credit box, will result in home sales essentially not changing in 2017." Challenges Yun says the bigger problem may be shrinking inventories. Some two million homes were listed for sale in October, roughly a four-month supply. Yun says a six- or seven-month supply would represent a healthy housing market. There's also been too much focus on building luxury homes and far less on smaller starter homes. Yun says the lack of choices when it comes to affordable homes may be adding to the reluctance among some millennials and first-time buyers, many of whom are more likely to rent right now rather than buy into the American dream of home ownership.