It's the overinflated prices which have been driven by investment companies buying up properties. This administration's strategy is to make the rates the reason for the slump in order to pressure the Fed to lower rates.
In the late 1970's mortgage rates were in double digits and people were still buying homes.
The investor groups today are buying up homes with cash so rates aren't directly affecting their purchases.
Which does have an impact on the insurance industryas a result. They aren't required to maintain homeowners insurance by a non-existent mortgage company. Because they have so much cash they can self insure. The burden of supporting the insurance industry falls to the dwindling numbers of owner occupants or the smaller investor that may have 2 or 3 properties.
That's not to say higher rates don't have any impact, they do but, the larger concern is the much higher prices of homes in the past few years.
If you purchase a home with a 30yr fixed rate then you know the rate won't go up but, there is a real possibility mortgage rates will be reduced during that 30 years which would allow you to refinance at a lower rate. If you pay the current inflated price for a home, you're stuck with that, in addition, if home values drop you're now upside down with no way out except a short sale or foreclosure if you can't make that payment for some reason.
Investment companies don't have that burden. They just rent the property and collect income on their investment. If rates fall, they can always mortgage the property to get a cheap cash infusion if desired at a low locked in rate.
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