Question

What happens to home prices as interest rates fluctuate? Have home prices recovered since rates have fallen since then to record lows in late 2010 and beyond?

Answer 1

Interest rates can significantly affect the cost of financing and interest rates, which in turn affects property-level costs and thus influences values. In the real estate business, conventional wisdom says that rising interest rates make buying or selling a home more difficult and decreasing interest rates make buying and selling easier.

Since rates have fallen to record lows in late 2010 in US, real question is have americans recovered since past 9-10 years?

A decade later, the American economy has recovered in many ways. Employers have been steadily adding jobs since early 2010, the stock market is booming and home prices have reached new all-time highs.

A big part of the plunge in household net worth had to do with housing.

As the financial crisis deepened, the delinquency rate for single-family mortgages spiked to 11.5%, and millions of homes went into foreclosure. In three years, the total amount of equity held by homeowners was cut in half.

Now that the real estate market has recovered and mortgages have stabilized, household equity has bounced back to exceed its pre-recession high. The delinquency rate has also steadily been sinking back towards its 2005 low of 1.42%. Recovery has not been made as expected, some scars cannot be healed.