IF you HAVE to pick between the two you always want higher interest rates than housing prices. Because:

1. With a higher interest rate you at least have a bigger tax write-off.

2. Higher purchase price means higher property taxes and a quicker rate of increases.

AND MOST IMPORTANT

3. You can refinance into a lower interest rate when rates come down. What you pay for your house is what you pay for it. You can’t refinance your way out of that.