Your Monthly Payment is Key
“A 1 percent increase in interest rates – from 5 percent to 6 percent – requires a 10 percent decline in home prices to have the same monthly payment.”
It’s a tough question! I would say a 1 percent increase in interest rates is more likely than an additional 10 percent decline in home prices in many parts of metro Phoenix, especially in the first-time home buyer price range.
Home prices in other areas of metro Phoenix will probably fall 10 percent or more before they bottom out. Interest rates are the wild card. I just realized I have a much better feel for home prices, as shaky as it is, than I do for interest rates.