Increased interest rates might also mean a smaller pay raise as well as a more gradual increase in the value of your investments. But slower may be surer. In the late 1970s and early 1980s, people were getting 10 percent pay raises, ... But housing prices were going up 12 to 15 percent, and so were cars.
The fact that the boom is ending should not be interpreted as indicating any serious trouble for builders or realtors -- unless, of course, some overextended on debt in expectations that sales would continue to accelerate. Prior to the recent explosion in sales, a level of 700,000 had been considered very strong. The current trend should be viewed as a return to normalcy rather than as the beginning of a housing recession.