[quote=EconProf]This is a huge move in one day for long-term interest rates.
In essence, long-term rates reflect anticipated inflation by the investment community. This will be a big blow to home-seekers, as mortgage rates will react. Recently, the only good news home-buyers have going for them are the historically low mortgage rates. That now looks about to change.[/quote]
Yup – it’s huge. One would expect, though, that higher interest rates would translate into lower prices. At least I hope that is the case — the market is so gamed that basic classical economics doesn’t make much sense. Any predictions how the SD housing market would respond to, say, 8% interest rates?
