Mortgage interest rates have been very low for quite a while now.

The average 30 year fixed rate fell below 4% just over two years ago -- on May 30, 2019 and has never looked back. 

Furthermore, this average rate has been below 3% for 36 of the past 41 weeks.

So, yes, mortgage interest rates are low.  Super low.

Eventually, they will start to rise -- maybe above 3%, maybe to stay above 3%, maybe above 3.5%, maybe even up to 4%!

When mortgage interest rates start to rise, will the housing market collapse?  Will prices fall?  I am thinking not -- so long as interest rates move slowly and steadily and not quickly and erratically.

Right now many houses are seeing 5+ (or 10+) offers within just a few days of being on the market.  Not all houses, in all price ranges, in all locations -- but many houses!

What will happen if interest rates start to rise?

Perhaps if they rise far enough, some of those buyers will no longer be qualified to buy -- or will no longer comfortable buying based on their mortgage payment.

But what will that actually mean?  Maybe instead of 5 - 10 offers on a house there will be 4 - 8?  Or 3 - 7? 

Demand exceeds supply by sooooo much right now that if mortgage interest rates rise a bit, unwinding some of that demand -- it will almost certainly still be a very strong seller's market -- just not a very, very, very strong seller's market.

So, if you start to see mortgage interest rates rising, yes it is possible that it will eventually have an overall impact on our local housing market -- but I don't think it is likely to change the overall market fundamentals.