I understand that higher interest rates cause one to qualify for less. But the effect the higher rates have on demand also means that you NEED less.

Prices may take a few months to adjust to higher interest rates, but they will adjust. And lots of folks just on this blog have been waiting for years to buy, not just a few months.

Won’t a modest amount of cash for a down payment go farther with higher interest rates and lower prices? If a home costs $250,000 with an 8% mortgage and $350,000 with a 5% mortgage, won’t someone with $50,000 cash have 20% to put down in the former case but not the latter?

And folks who pay cash do save more on mortgage interest when rates are higher. But won’t there also be an opportunity cost? Couldn’t they put the $ in CD’s? Is the difference between what mortgage interest rates are and what you can earn in CD’s higher when rates are higher? I can remember earning close to 10% on a CD in the mid 1980’s. What were mortgage rates then?