nsr that was well put. Interest rate shock would indeed rachet pricing down in an appropriate manner. My read is that pricing would be slow to respond at first, then catch up, maybe even overshoot a tad, then come back to the correlating interest rate environment. I would also agree that buying a lower priced home in a high interest rate environment is always better then a higher priced home in a low interest rate environment.
Beyond recurring carrying costs there is refinance opportunity sometime down the road, you already have a higher equity stake, and people who are saving or have saved cash are in a good position.
I also think it is not a question of if rates will rise but when… I think in order to get the economic house we all share back in order we need to do this… Unfortunately back in 03 I was spouting off that within a few years rates would HAVE to be higher…
