Real Estate Values When Mortgage Rates Rapidly Rise
Ever wonder what happens to real estate values when interest rates rise rapidly? For the answer we need to consider the factors that cause interest rates to rise.
This slide is a historical look back on what happened in the past when interest rates skyrocketed over a short period of time. This has happened 4 times over the last 30+ years. We can see in each one of these graphs is what happened to the value of real estate during that time.
When the economy is doing well, interest rates rise…But when the economy is doing really, really well–they skyrocket. So what happens to home prices ‐ when everything’s going really well in the economy? They go up as well.
Now interest rates shooting up will have an impact on the market as some buyers can afford less. Some people think it’s going to drive prices down, however, history tells us a different story. The last four times over the past 30 years that interest rates skyrocketed —every single one of those times prices still appreciated.