Housing Prices Could Soon Take Another Hit

by: Benign Brodwicz


The February value of the index was 153. The 30-year mortgage rate is about 4.7 percent. If and when long-term interest rates go up just 150 basis points, housing prices in aggregate might be expected to take a further hit in the neighborhood of one third.

Here is the chart for the Composite-US series beginning in 1987. A rise in mortgage rates to 6 percent would imply a further 20 percent fall in house prices. And that assumes no overshooting.


As www.patrick.net says, now is not a good time to buy a house.