Question

Explain why Would you be more likely to buy a house if mortgage rates rise from 4% to 6% and house prices fall 4% to 2%?

Please explain

Answer 1

When the interest rates increases, the houses prices decreases.this is a common phenomenon which could be attributed to low demand due to an adverse scenario in the economy.

One can relate it with an example of covid-19 when there is slump in the houses price all across the country, because the demand is low. when the interest rate is high, so one can buy through such situations when you will have to pay the lesser price for the house and the increasing mortgage rates since it keeps on fluctuating according to the interest rates of the monetary policies of Federal Reserve,the primary consideration for buying of a house should always be the house prices not the mortgage rates.