Will a rise in mortgage interest rates affect housing prices?

[Jim Garcia]

There is much discussion that, if interest rates rise, the price of houses in Castle Rock, CO will not continue to rise or not rise at the current fast pace. The assumption is that people base buying decisions on the monthly mortgage interest rates. However with the shortage of housing across the entire U.S., will that actually slow the increase in prices. I think there are 2 factors in place. 1) There is a lot of money in the system and 2) Higher mortgage rates will price many people out of the market. So there will be less buyers who can compete, but there will still be many buyers in the market trying to purchase their "future", whether that be a primary residence or investment properties for retirement income. What are your thoughts?