If rates changed instantaneously by 1% and no other factors in the economy changed, then the price would be inversely related to rate.
However, rate changes never happen in a vaccum. Rates respond to underlying economics, so changes in home prices rarely respond as you suggest.
Example #1: From 2006 to 2010, 30-yr mortgage rates declined from around 6.5% to less than 5%.
Did prices increase by 10%+ during that period ? Hell No. Prices declined at the steepest rates since the depression.
Example #2: In late 2002 30-yr mortgage interest rates were at 6%. BY mid 2006 they were 6.5%.
Were home prices flat during that period ? No. They were quite bubblicious.
Example #3: From 1990 to 1995 rates dropped from 10% + to about 7.5%. Did prices rise during this period ? Not really.
This period included the worst decline (until superceded by the 2006-2009 decline) in home prices in post-war California.
Example #4: In 1972, 30-yr mortgage rates were about 7.4%. By 1989, rates were above 10%. What did home prices do doing this period ?
Hint: they did not decline.
The simple point is that it’s not that simple. Rates do not change in a vacuum. As a thought experiment prices are inversely proportional to rates, but in reality, it is not neccessarily so.
now it’s more then just X vs Y, people adjust by
taking shorter terms or ARMs or I/Os
but yes, which is why i didn’t turn out in the last 2 years, the Bernank was pushing chea money to support prices, when rates rose 2%, prices would be subject to a decline of 20%
now it’s more then just X vs Y, people adjust by
taking shorter terms or ARMs or I/Os
but yes, which is why i didn’t turn out in the last 2 years, the Bernank was pushing chea money to support prices, when rates rose 2%, prices would be subject to a decline of 20%
now it’s more then just X vs Y, people adjust by
taking shorter terms or ARMs or I/Os
but yes, which is why i didn’t turn out in the last 2 years, the Bernank was pushing chea money to support prices, when rates rose 2%, prices would be subject to a decline of 20%
now it’s more then just X vs Y, people adjust by
taking shorter terms or ARMs or I/Os
but yes, which is why i didn’t turn out in the last 2 years, the Bernank was pushing chea money to support prices, when rates rose 2%, prices would be subject to a decline of 20%
now it’s more then just X vs Y, people adjust by
taking shorter terms or ARMs or I/Os
but yes, which is why i didn’t turn out in the last 2 years, the Bernank was pushing chea money to support prices, when rates rose 2%, prices would be subject to a decline of 20%
They have the easy money pedal pushed to the floor with record low rates and almost zero down for a reason. The system is very fragile and sensitive now. Looking at past behavior is futile at this point.
They have the easy money pedal pushed to the floor with record low rates and almost zero down for a reason. The system is very fragile and sensitive now. Looking at past behavior is futile at this point.
They have the easy money pedal pushed to the floor with record low rates and almost zero down for a reason. The system is very fragile and sensitive now. Looking at past behavior is futile at this point.
They have the easy money pedal pushed to the floor with record low rates and almost zero down for a reason. The system is very fragile and sensitive now. Looking at past behavior is futile at this point.
They have the easy money pedal pushed to the floor with record low rates and almost zero down for a reason. The system is very fragile and sensitive now. Looking at past behavior is futile at this point.
