Are you on the losing end of it? If you're not looking to sell your home while rates are high, it doesn't really impact you. While your home might decline from

Are you on the losing end of it? If you're not looking to sell your home while rates are high, it doesn't really impact you. While your home might decline from $500k to $450k, when interest rates lower your home value will climb back up as buyers see lower monthly payments. If interest rates are permanently high, then you got to lock in an amazing rate that will effectively make your housing cheaper - even if your purchase price was higher. If/when rates come back down, your property value will go back up and unless you're forced to sell while rates are high, you won't experience anything bad. Even if you're worried that maybe you could have gotten a better deal with a lower price and higher interest loan, I wouldn't be. Let's say you buy a home at $500,000 at 4% interest. Interest rates hit 6% and your home's value declines to $450,000. The person who buys at $450,000 at 6% will be paying $2,150 vs. your $1,900 ($250/mo more, 13% more). Let's say interest rates go back down to 4% in 2025. They can refinance at 4% and their purchase price was $450,000, but they've already paid $49,700 in interest. They'd have payments around $1,750/mo (assuming they did a 28-year term) which is less than your $1,900. Ultimately, they'd be paying around $641,000 over the life of the loan against your $687,000 so it's not really that different. Of course, that doesn't consider the fact that the other person would also need to pay the loan closing costs a second time and that if they sold the house after 5 or 10 years, they wouldn't have that 4% interest rate for as long. So you're probably still in a significantly better position financially - unless you're quite sure you're going to stay in the home for 30 years. If you're only going to be there for 5 years, you'd rather pay $1,900/mo ($114,000) than $2,150/mo for the first 2 years 4 months and then $1,750 for 2 years 8 months ($116,200). Plus, because interest gets front-loaded, you end up with more equity with the lower rate. At 6%, you're getting 0.0008% equity per month instead of 0.0012% per month. With the 4% loan, you've paid off $38,210 over the first 5 years (9.5% of the loan principal). With the 6% loan, you'd pay off $25,004 over the first 5 years (6.9% of the loan principal). Even if you assume that the home is really worth $500,000 and not the $450,000 purchase price, the higher rate still means that you only own 26.9% of the home rather than 29.5% of the home (assuming 20% down). They've been paying a higher monthly and they own a lower percentage of their home! Again, if you're going to stay for 30 years, buying at a lower price and a higher rate might end up better if you can refinance. However, it does mean that you end up with less equity (paying more interest) earlier in the loan. Basically, you're probably in a way better position than someone buying at 6% while getting the benefit of downward pressure on housing prices.