This column originally appeared on Real Money Pro at 8:44 a.m. EDT on July 8.NEW YORK ( Real Money) -- The sharp two-month climb in interest rates represents a significant credit event. The rate rise will have reverberations for housing, on the general economy and for the U.S. stock market. I remain of the view that many areas in both public and private sectors are far more vulnerable to the recent rise in interest rates than most market participants recognize. Among the areas most impacted by a ratcheting in interest rates is housing -- the "straw that stirs the drink" of the domestic economy. Back in early 2012, I adopted a variant view and suggested that housing's recovery would surprise most to the upside. And while housing's momentum has been impressive over the last year and the sector appears to have entered a long-lived recovery, I now suspect that a surprising pause (of consequence) could occur over the next six to 12 months. I would now avoid most housing-related stocks. A possible slowdown in the U.S. housing market will have broad economic implications - and some of the more optimistic second-half domestic economic forecasts might prove to be too optimistic. I expect no better than 3% nominal GDP growth (1.5% real) over the last two quarters of this year. Importantly, this well-below-consensus projection is a big departure from the Fed's official forecast of over 4% nominal GDP, which provides a guideline to monetary policy. My more sobering economic view incorporates the recent improvement in the jobs market but recognizes the continued weakness in business capital spending and the drag from lower government expenditures combined with the anticipation of moderating retail sales and personal consumption (given a five-year low in the savings rate and the anticipated loss of refinancing-aided household cash flow). Let's consider the ramifications of the sharp climb in interest rates since early May on the U.S. housing market. A slowdown in the residential real estate markets will pose a threat to existing- and new-home sales, home prices, builders and bank earnings and the home improvement market. 1. Existing-home sales will suffer. A surge in new-age purchases made by institutional investors (hedge funds, private equity, etc.) has buoyed the U.S housing market. These purchases have pushed up prices to above-consensus low-double-digit increases, sowing the seeds for a housing slowdown.