Mortgage Rates - Do you think they're going up?

[Anonymous]

Anonymous wrote:The crash in mortgage market would have had a larger impact on home prices than a gradual interest rate increase- so really the lowest real-term prices for the DC area would have been 2008-2010 or so. Really, you saw flat-lining or very slight drops in prime areas (NW/close-in suburbs), and sharper drops in less prime areas (loudoun county etc.). A mortgage rate increase will probably dampen the already recovering prices in prime areas, and perhaps result in slight drops in the less prime areas. If your target is prime areas (NW/close-in MD, VA), you may be in a better economic position to buy now, low rates and earlier in the recovery stage.

That's not a good comparison at all. During 2008-10, rates actually dropped for a lot of people. Folks with bad credit got shut out of the market -- which is why a lot of the lower-income areas (such as Prince William and Prince George's) saw price drops. And the jumbo market basically stopped -- but that didn't cut high-end house prices, it just meant that there were very few high-end homes that sold (buyers couldn't buy, and sellers decided they'd rather wait for jumbo mortgages to come back rather than cut prices a lot). But for people with good credit who didn't need a jumbo mortgage, rates got better.