> If lenders are willing to finance an investment with 3% yield, then house prices will jump to 33x their annual rent value - it goes without saying that's onl

> If lenders are willing to finance an investment with 3% yield, then house prices will jump to 33x their annual rent value - it goes without saying that's only possible in low interest markets. There's truth to this, but I don't think house prices should simply be (annual rent) / interest_rate. There's a variety of other homeowner costs to consider (property taxes, HOA, maintenance, etc.) and buyers are taking an opportunity cost not being able to invest their paid-down principal (including down payment) in riskier assets. I have a calculator at https://medium.com/@usaar33/an-up-to-date-buy-or-rent-calculator-22d0bf9bbbb5 https://medium.com/@usaar33/an-up-to-date-buy-or-rent-calcul... to find indifference point on the buyer side. Other huge inputs are future appreciation rates of investment and property. At default values, price moves at about half that of mortgage rate changes: e.g. halving the mortgage rate only raises the house price willing to pay by ~16%; doubling it, cuts price by ~25%.