Interest rates will effect home prices based on the level of income from a job that will allow the debt to be reliably serviced.
High rates can only be reliably serviced if the actual dollar cost is low enough in relationship to the income. Thus, high rates in the 1980’s could be sustained because the amounts of the loans were low enough to allow the debt to be reliably serviced/maintained.
Today’s income levels absolutely do not allow for this scenario to take place. If rates rise, prices must come down.
Rates usually rise with an improving economy. I doubt we’ll have an improving economy for quite sometime to come.
