Sure, the resets of 2-year teaser rates in the sub-prime category was the initial trigger. The rest of the decline is due to “gravity.” (prices falling to levels more in line with fundamentals).
During the adjustment period (reversion to the mean) from 2007 to 2010 or so, rates declined precipitously but housing prices declined as well. Obviously the force of gravity outweighed changes in rates during that time.
The answer to the original quesiton of this thread “>1% interest SPIKE = 10% house price drop? ” is “NO.” I think we can also agree on that.
