House prices are like bond prices. When interest rates are low, prices go up. When rates rise, prices will fall. People buy houses based on the monthly payment

House prices are like bond prices. When interest rates are low, prices go up. When rates rise, prices will fall. People buy houses based on the monthly payment they can qualify for. Right now, prices are high because the low interest rates mean lowish monthly payments on inflated prices. But when rates rise, the value of the houses will fall because buyers will not be able to qualify at the previous inflated prices. This will mean that a lot of homeowners will be underwater again. Even though they should be able to afford their payment, there will be a similar level of panic.