Short presentation arguing that, contrary to common belief, higher mortgage rates have historically correlated with higher home prices; speaker claims that since 1994 there were seven episodes of mortgage-rate increases of 1% or more and that in each of those seven episodes home prices rose.
Higher mortgage rates correlate with higher home prices. And almost everyone thinks it's the opposite. Almost everyone thinks that when mortgage rates go higher. Oh, well, of course, don't you know that property prices would have to come down because a person's payment would have to be larger, and that impedes affordability. So therefore, when rates rise, prices fall. Since 1994, in this stretch, we've had mortgage rates that have increased substantially seven different times. That's defined as a mortgage rate that increases by 1% or more. Okay. That's happened seven different, different times in the last 30 years, these substantially rising rate environments. And of those seven times that mortgage rates rose, how many of those seven do you think that home prices rose or fell? The last seven times that mortgage rates rose, home prices rose every single time. In conjunction, correlating with higher mortgage rates.
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