[quote=werewolf34]More specifically, I’ve been told that a 1% rate increase lowers a home price (SFR) about $100K as a rule of thumb. Does this rule hold for SD?[/quote]
I don’t think this is true anywhere. The amount of discount due to a 1% rate increase would be dependent on the price of the home. So, no set dollar amount would be valid. (It would be true if we were discussing a very specific price range)
If you would like to see what a 1% rate increase will do to home prices, you could play with a mortgage calculator. Pick a monthly payment and a down payment and vary the interest rate.
But, keep in mind that this experiment is not the complete picture. Yes, prices of homes vary with interest rates, but they also vary with people’s attitudes. The housing bubble occurred mostly when interest rates were higher than they currently are. Rates have dropped as house prices have dropped, so clearly there is more at play here than just interest rates.
