Every time the interest rate has lowered, the real estate industry seems to increase the price of the home. And, when interest rates fall, the price of the home seems to get lowered.
With the Treasury financings over the next 90 days, interest rates may very well increase on the 10 year. It could be that further reductions in home prices will follow.
I'm not sure if your model has such a scenario ( sustained falling prices followed by increased mortgage rates ), but it would be terribly interesting to look & see if it does. If it does, what was the outcome?
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