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> The price should not be a function of the interest rate, it should be an independent variable.

And what should that variable be based on?

House prices = How much the buyer can afford (savings and income) - Cost of interest

You are saying that somehow we should ignore the cost of interest, but like, how???

If interest rates go up, House prices go down. Makes sense to me.

It would be largely independent if interest rates represented market rates. However, given the power and actions of the Federal Reserve, that will never be so while that institution exists.

House prices would not be independent of interest rates if "interest rates represented market rates". House prices may be different but the math above still holds. If interest rates are 1%, house prices are "high", because people can "afford more house". If interest rates go to 20%, house prices drop (by about 20%) because more of their money goes to interest.

Your point that if the fed didn't control rates that somehow house prices would be independent of interest rates, but that's not how house prices work.

What are you seeing that I'm not?

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