Will Interest Rate Increases Slow Momentum?

Going through my usual reading this morning brought some things to my attention I thought I would share:

Interest rates have increased more than 1% since Dec, 2012.  Our government is letting that happen because the economy is strengthening on a broad scale.  Historically, interest rates average 6.5%, so we are certainly well below that level.  With current interest rates, we still find buying 41% cheaper than renting - on a national basis (I could go on and on about the numerous additional and much more meaningful reasons buying is better than renting).  Recent increases in mortgage rates have reduced buying power by 18% since May.

Those are some interesting facts.  Decreased buying power and  rising rates sure sound like bad news for home values.  Fortunately, a solid economy appears to be more than enough to sustain price gains and, probably, continue to drive prices up, although slower than what we have seen lately.  The truth is, most people would much prefer to own a home in a neighborhood with other homeowners for all of the great reasons one might expect.