We assume that if mortgage rates go up, prices will come down – but how has that relationship behaved in the past?  Rich details the history here, and explains why:

http://www.voiceofsandiego.org/topics/news/monthly-home-payments-lower-than-average-doesnt-assure-higher-prices/

Below is a graph of home purchase price valuations alongside mortgage rates. If rates were driving home valuations, you’d expect these two lines to move in opposite directions. But they don’t. For example, homes have gotten pretty expensive when rates were sky-high (early 1980s), dirt cheap when rates were middling (late 1990s) and reasonably cheap when rates were at all-time lows (early 2010s). There isn’t much of a discernible relationship in this graph:

Read full article here:

http://www.voiceofsandiego.org/topics/news/monthly-home-payments-lower-than-average-doesnt-assure-higher-prices/

Save

Pin It on Pinterest