Will An Increase In Interest Rates Crush Home Prices

Dated: December 4 2014

Views: 194

Renee Plumlee, REALTOR®
IVY LEAGUE REALTY
www.renee.ivyleaguerealtytexas.com 

by The KCM Crew
on December 4, 2014 in Interest Rates, Pricing

There are some who are calling for a substantial drop in home prices should mortgage interest rates begin to rise rapidly. Intuitively that makes sense. The cost of a home is determined by the price of the home and the price of financing that home. If mortgage interest rates increase, less people will be able to buy. The logic says prices will fall if demand decreases.However, history shows us that this has not been the case the last four times mortgage interest rates dramatically increased.Here is a graph showing what actually did happen:Interest Rate Increases  Keeping Current MattersWe will have to wait and see what happens as we move forward. But, a fall in prices should rates go up is not guaranteed.by The KCM Crew on December 4, 2014 in Interest Rates, Pricing
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Terry Ivie

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