"Interest rates and home prices tend to move in opposite directions."

Some people mistakenly believe buying a home is a bad idea when prices are up or when interest rates are high. In fact, either of those situations can be a great time to buy.

History shows that high interest rates dampen demand for homes. With fewer buyers available, sellers can't raise their prices--in fact, they may have to drop asking prices to get their homes sold. That's a good opportunity for buyers, who can always refinance when interest rates drop, as they eventually will.

Low interest rates, on the other hand, tend to bring buyers into the market, bidding home prices up. The low rates, however, make those higher prices more affordable for buyers.