[quote=j]A 2% increase in mortgage rates will halt home sales, so the Fed will not leave the market.[/quote]

I agree. Ironically, it was government intervention that helped cause the real estate bubble in the first place, but the same intervention will be required to prevent further devaluation.

And one more reason, among many, that I don’t buy the “this is the time to invest in real estate” argument from some RE investors. I don’t think DC will allow rates to increase simply because they’ll never clear their books of the inventory (and shadow inventory).