LAST week's rise in interest rates came at an unfortunate time for the many companies in the sector that are reporting interim results over the next few weeks.
It has cast fresh doubts over the industry's second half prospects and underlined its dependence on a fragile domestic economy.
The sharp fall in house builders' share prices on news of the rate rise highlighted the City's concerns about its impact.
Despite issuing an upbeat trading statement on the day before the rate rise, Bellway's share price fell by 4.3 per cent on the news, while Barratt's slid by 5.1 per cent and Wimpey's by 4.6 per cent.
Taylor Woodrow's results last week showed that - as with its rivals - it is relying more on lower margin social housing units to maintain completions.
As the rate rise comes ahead of the key autumn selling season and debt-laden consumers and buy-to-let investors grow wary of the housing market, this may become more widespread.
Meanwhile the pace of consolidation may slow. The tussle for McCarthy & Stone goes on and last week McInerney acquired Bowey Homes Holdings for £30.5 million, including debt. But further deals may be all the harder to complete against an uncertain sales background.
Alfred McAlpine's and Morgan Sindall's results over the past week showed the larger contractors remain positive on the outlook. But the rate rise will contribute to some cooling of the commercial building market, which has recently been keeping many contractors busy.
The sharp falls in the share prices of some of the larger quoted property groups such as British Land and Hammerson after the rate rise suggest some of the sector's largest clients may face leaner times.
The pressure on smaller contractors may also increase as spending on RMI slows. Last week Hanson said weak demand here was behind a 19 per cent fall in first half brick volumes - and that was before the rate rise.