What would be the better option when buying a house, higher housing price with a lower interest rate or a lower price with a higher rate?

If the fed raises rates in the near future (like they have been hinting at), prices should come down with higher rates, right?

Believe it or not with a lower interest rate you can afford more house, they may end up being almost the same dollar amount.
 

ETA: do the math and figure it out.

That's what I was thinking, and that if you were going to pay off your house early a higher rate might be a little better.

Keep an eye on housing prices once the fed starts raising interest rates!

Basically, for each 1% increase in interest rates, it costs $X,XXX more per month for the same mortgage.  Once interest rates go up, you're going to see housing prices flatten and potentially go down (depending on how high the rate goes).

As for buying a house, there is no perfect time.  When interest rates are low, prices tend to be high.  When prices are low, rates tend to be high.  However, you can refinance.  So wait until interest rates go up and housing prices go down.  Buy what you can within reason, then refinance once rates come back down.

Easy said than done of course.

RF

How fast do you think they will rise? about 1% a year or so?

double

Your guess is as good as mine.

Considering the US economy is doing well, but not that well, I'd expect interest rates to climb pretty slowly.  Maybe even < 1% per year?  However, if inflation starts to dramatically rise, the rate could move faster than that.

RF

I think I replied to OP in GD on this type of topic, but at least for the next year or two I would be surprised if interest rates go up more than .5% per year. They have stated they will go slowly at first, but it's all in reaction to what the market is doing so really it's anyone's guess. Barring rampant inflation coming into play, I don't think they are going to come up very quickly at all.