https://www.dailybreeze.com/2021/05/19/carla-fried-opinion-80-of-home-price-gains-since-1990-due-to-falling-rates/

I was just discussing this via chat with a friend a few weeks ago and did some simple calcs.

QuoteOne more thing driving home appreciation is low inflation and thus low interest rates. Most people budget their housing based on the monthly payment. So right now if you get a 3.5% loan on $500,000 for 30 years, that's about $2200/month. If the mortgage were at 9% like they were in the 1980s, that same payment would let you afford a $280,000 house. So if we have inflation and interest rates go up, home prices have to fall.

Similarly, our insurance went from $1800/year four years ago to $7800/yr. So that's $500/month change. So lop that off my theoretical $2200/mo payment. So really, instead of $280,000 that takes you down to $215K.

So if you go from cheap insurance and 3.5% to expensive insurance and 9% interest, you go from someone with the exact same income being able to afford $215K instead of $500K. Translation: real estate apocalypse