If you are looking to rental properties as an investment, the interest rate is a large part of the cost of doing business. If you think that you can make 10% re

If you are looking to rental properties as an investment, the interest rate is a large part of the cost of doing business. If you think that you can make 10% renting out a property but the interest rate is 8%, that is a pretty slim margin for something with so much overhead. If you think you can make 10% and the rate is 2%, that a bit more juicy. Because high interest rates can reduce demand, in a vacuum you would also see a reduction in the price of the property, making them more affordable. Of course this price is also impacted by countless other things, builder velocity being one of them, so in the real world it takes time to sort out. The 70s, 80s, 90s had relatively stable home ownership rates despite very high interest rates. In 2016 the US reached a bottom in home ownership at 62.9 despite historically low rates. BTW I was not referring to rich people living in their homes that they got with high interest rates, the comment was specifically towards investment property. Definitely agree that hoarding properties is out of hand.