If Mortgage Rates Rise Will Home Prices Drop?
In a recent article published by Freddie Mac stated the impact the projected rise in mortgage rates might have on the housing market. We often assume that an increase in mortgage rates will cause a slow down in real estate purchases, which in turn, may lead to a drop in housing prices. But, prices are usually determined by supply and demand and while rising mortgage rates may slow this demand, they also affect the supply. Most people looking to buy a new home will need to sell their existing one. "Once financing costs for a new mortgage rise above the [...]