The question of whether interest rates and housing prices are inversely related is an old one. Common sense and economic theory would suggest the connection is real. But Rich T. has pointed out the empirical evidence supporting that conclusion is weak or nonexistent.
We all know a variety of factors influence housing price trends. I suggest that periods of rapidly rising interest rates are also periods of rising inflationary expectations. So house prices then are both pushed down by rising interest rates and pushed up by buyers hoping to capitalize on rising inflation. The years around 1980, when inflation hit 13.5% and interest rates mid-teens are the best example of this.
