April 5, 2005
Sellers are learning at the high end [that overpricing] isn't going to work... and they are shocked," says Prof. Miller. Rising interest rates won't help. "Where we do tend to see the greatest sensitivity is at the very high end," says Delores Conway, director of Casden Real Estate Economics Forecast at the University of Southern California's Lusk Center. As rates rise, "what will happen most likely is that prices will level off, and you will see it first in the luxury markets." The average rate on a 30-year-fixed mortgage crossed the 6% mark in March. NAR economists expect the 30-year fixed-rate mortgage to gradually increase to 6.7% by the end of the year, with an average rate 6.2% for the year.