Different Situation People are In:
If you own a home already and sitting at low interest you shouldn't move.
if you need to move desparately, and found a good priced home due to high interest rate.
Housing bubbles may occur in local or global real estate markets. In their late stages, they are typically characterized by rapid increases in the valuations of real property until unsustainable levels are reached relative to incomes, price-to-rent ratios, and other economic indicators of affordability. This may be followed by decreases in home prices that result in many owners finding themselves in a position of negative equity—a mortgage debt higher than the value of the property.
Former U.S. Federal Reserve Board Chairman Alan Greenspan said "We had a bubble in housing",[32][33] and also said in the wake of the subprime mortgage and credit crisis in 2007, "I really didn't get it until very late in 2005 and 2006." In 2001, Alan Greenspan dropped interest rates to a low 1% in order to jump the economy after the ".com" bubble. It was then bankers and other Wall Street firms started borrowing money due to its inexpensiveness.[34]
Do interest rates historically impact housing prices?
Many people have told me to just wait until interest rates go up and the housing market will crash. But, do interest rates have that big of an impact on housing prices? We can see that they directly impact how much house someone can afford but there are about 1,000 other factors that drive housing prices up and down. Some of the things that we must look at in regards to housing prices are:
Housing supply: How many houses are currently for sale compared to the demand for housing
Economy: Do people have jobs and money to pay for housing?
Lending guidelines: Are the current loans based on solid financials or pipe dreams?
Population changes: Is the population increasing or decreasing?
New construction: Are enough new houses being built for demand?
Prices and affordability: Are prices too high for most people to buy?
There are other factors as well to consider but it is not just interest rates that drive prices. Can interest rates be a piece of the puzzle? Yes! But check the charts below that show interest rates and housing prices.
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