[quote=sdrealtor]Interest rates werent 9% in 1997 when I bought my 1st home here and when they are higher folks will just opt for adjustable rates in the short term and refi when they drop. Expecting and waiting for 9% interest rates is a folly IMO and will leave you waiting to buy well past the prime years of your life. Rules of thumb like that are dangerous to get stuck on. Watch, run numbersd and take the plunge when it makes sense for you rather than waiting for some mythical number.[/quote]
Are you saying that increasing rates from current to e.g. 9% will not affect the prices that much because of the ARMs and such?
You can run now all the numbers you want but if the rates go to 9% or God forbid, double digits, I believe the housing prices will also go down significantly, (i.e. > 20%). If you have to sell for whatever reason at that point, you will be taking a bath. (to be clear, I am talking more mid-range housing), that’s what most potential buyers are afraid of. But, you have to tolerate some risk in RE, and go on with your life, so maybe you buy something less that what you could afford, or move to another state.
