Yes, as I mentioned there are other bearish factors for housing that were not in place back then. But this doesn’t nullify my argument that there is not a dependable link between rising rates and lower prices. What I’m trying to argue against is the seeming tautology that some people cite wherein rising rates will exactly be offset by lower prices.
CAR’s item #4 notes a compelling distinction, though… in the 80s, people wages were rising to at least somewhat keep up with rising monthly payments. Home prices stayed flat nominally, but real home prices fell. In an environment of lower wage growth perhaps nominal prices would not be able to hang in there so well if rates were rising.
Anyway, in my second post I cited what I think is the biggest risk factor, which is the existence of forced sellers in a high rate environment. I think that would push prices down. (But I don’t think that’s dependable either).
