On the other hand...

After my somewhat bearish post earlier today on housing, I figured that the economist in me should come out. So I quote Chris Mayer, who captures a sentiment that I share very well:

“The consensus is that higher rates are bad for real estate. They raise borrowing costs, for sure, and the idea is this will push prices lower. And it may happen that way. On the other hand, higher rates deter new construction and raise the replacement costs of real estate assets. Growing rents can also blunt the effect of higher rates. So it's not a given that higher rates equal lower real estate prices long term.”