[quote=briansd1]
Hard to look to recent history for guidance.
I remember people claiming that real estate prices would never drop without an employment downturn.
But, surprise, surprise, we had a real estate crash that caused general unemployment, which then caused more more unemployment.
I think that rising rates will cause stagnation and more choices for buyers.[/quote]
It depends on what accompanies higher interest rates.
If rates are rising becuase of an improving economy, as in recovery stages of the business cycle, there could actually be more demand as interest rates rise. (See all historical recoveries for example)
If interest rates are rising because of increased inflation, then it takes more dollars to buy the same thing (rent, property) and prices also go up (see the 1970’s).
Interest rates do not go up in a vacuum. Most people that assume that interest rate increases translate into lower home prices ignore all the other variables.
