
Today's high home valuations are only justified by record low interest rates. Will today's buyers become bagholders when interest rates rise? Will rising mortgage rates cause house prices to crash again? It's a valid question, and a valid concern for today's homebuyers. Nobody wants to be an underwater bagholder trapped in a debtor's prison awaiting lender approval of a sale to move on with their life. At a minimum, the prospect of rising rates curbing appreciation should temper buyer's enthusiasm toward making a fortune on home-price appreciation. How likely is it that rising mortgage rates will cause house prices to tumble? Let's look at the possible scenarios. We've already seen that higher house prices caused a decline in sales volumes…[READ MORE]