Could Rising Rates Stimulate the Housing Market?
Additionally, there is some evidence that the market is beginning to cool down. This post mentions signs that the building of new homes is slowing down and that the rising rates are having an impact. As many economists have mentioned there is a broad disparity between apartment prices and housing prices in a city - a sure sign of a bubble. People will pay a certain premium for real estate, but not beyond a certain point. Its more akin to a tax. People will pay more in taxes to live in California, but they won't be beyond a certain level. Once prices rise too far out of sync it hints that much of the buying is speculative in nature, rather than based on true demand for an area.