[quote=SK in CV]It did both. Prices were mostly flat through the mid 70’s. As were rates. There was a bit of a real estate bubble at the end of the ’70’s, though prices did not rise as much as the CPI, as mortgage interest rates had already risen from the 4 to 7% range, to over 9% by mid ’74. RE prices peaked around 1980, then fell sharply through most of the next decade.
I don’t see any flattening in the mid 70s. Rates went up from 1971-1974 and price went up in 1971-1974. Rates went down between 1974-1977. Price went up between 1974-1977. Rates doubled in 1977-1981 and CA median home price went up 72%. So, between 1968-1989, there weren’t a single year where the median home price in CA declined (I didn’t count 1984, since it was basically flat). In 1980, CA median home price was $99k and by 1990, the median home price $193k. So, where did you get price fell sharply between 1980-1990?
Also, between 1970-1972, rates was basically flat at ~7.5% and price went up ~16%. Then between 1972-1974, rates went from ~7.5% to 10%, that’s a 33% increase. Over that same period, price went up another 21%. Now, between 1974-1975, rates drop from 10% to ~9% and price went up 20% over just 1 year.
Like FormerSanDiegan said, I don’t see any correlation or causation between rates and price. Do you have data to back up your assertion that there is one?
