The sharp rise in interest rates so far this year has been bad news for mortgage bankers and homeowners, and good news for banks and thrifts that specialize in adjustable-rate mortgages.

But the rate surge will also be bad for the economy, for home building, and for first-time homebuyers. David Lereah, chief economist for the Mortgage Bankers Association, said in testimony to a House Banking subcommittee that some 200,000 renters who would have purchased a home this year would now be shut out of the market because of higher interest costs.

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