I think the one thing we can count on during this debacle is low interest rates.
Also keep in mind that 7% rates would destroy this low-end market recovery we have seen which would send prices even lower IMHO.
[/quote]
The question is whether the Fed can continue to keep (re: manipulate) rates low if and when inflation picks back up. That may not be for a few years down the road, but when inflation picks up again and rates head upward (which the Fed won’t have much control over initially, as it’ll be a surprise, by definition) that will influence housing prices (re: lower due to higher financing costs, all else being equal) negatively, just as lower rates were one of the sparks that ignited the boom. My guess is that higher interest rates, resulting from higher inflation, a few years down the road is why residential real estate won’t head up for a while after hitting bottom (whenever that happens).
