WOW ! With mortgage rates up over 1 % in the last few weeks house prices should start dropping more. Especially those stubborn sellers in good areas who are not underwater and have been holding out!! I imagine otherwise realtors who have been working with buyers are going to have to show them less expensive houses because they can no longer qualify for the mortgage amount they could a few weeks ago. Not sure how much it will change the cheap bank owned properties.
You could make the exact opposite argument ... rising mortgage rates cause people to feel the bottom in rates has been hit and they will now rush in to buy before rates go higher.
good point. one would think they would have to drop in order for consumers to continue to make their payments.
There is no argument, rising mortgage rates are NOT going make people feel like the bottom in rates was in and that now its the time to buy houses before rates get back to 6, 7 or even 8%.
Housing prices continue to fall. There's a tidal wave of inventory of REOs that banks won't even release, for fear of the price deflation it will cause to the existing listed crap.
Rising mortgage rates will only slow down the process of the refinancing boom going on at this very moment, once everyone is locked in and rates start climbing up we will still see no end to the housing bottom as unemployment rises and more foreclosures enter the market place. Of course lower interest rates will soak up some of the excess inventory on the market, however with so many out of work or not having the income to apply for a standard 30 yr fixed mortgage rate housing will take an even longer time to bottom out. As I said it will be at least 10 years or more before most of this housing mess is completely done with.