Housing prices generally move in the opposite direction of interest rates so any interest rate hike will be offset by lower prices thus resulting in the same carrying cost. I’d rather have mortgage rates go up to 10% and housing prices adjust downward accordingly. Any would-be-buyer should hope so.
23109VC, another thing is if you’re thinking about remaining in your home for 20 years, or for good, you’d want rates to go way high (with commensurate downward housing prices) because rates don’t permanently stay high. You can then refinance your mortgage when rates come down and thus end-up with a low mortgage balance and low rates.
The worse thing would be for rates to get lower and prices to stagnate high. That will prevent existing buyer from going under water, it won’t help you buy a house.
To look at it another way, high prices combined low rates put a floor on your cost of ownership. But low prices combined with high rates put a ceiling on your cost of ownership. With the latter scenario, you have the potential of future appreciation windfall as well as the possibility to refinance at much lower rates thus further decreasing your cost of ownership. So hope for rates to go up with a matching decrease in property values.
