How will rates affect home prices?

[Kenny Smith]

As a Realtor in the Denver market, I track where our markets numbers are on a daily basis.  With the rise of rates, home prices have fallen, just like most places.  I'm not so curious on where rates will go, because nobody has a crystal ball.  More so the affect on the market of potential falling rates.

For example, rates dropped yesterday.  The likelihood of home prices or the market changing because of a small drop is likely not very much.  At what rate percentage could we start to see home prices going back up?  And if they do, by how much?  It seems the equity growth we've seen over the last 2 years was unprecedented.  Can that continue?  Or, if rates drop just slightly, do we simply see a more balanced market and home prices plateau for a while?