Your home is only worth as much as your next buyer needed and able to afford...  This index below indicates how much a buyer can qualify for, based on a 40% debt ratio, in respective to the mortgage rates...    For example, an $80,000 annual household income, with 20% down, at 7% interest rate (about 2002), can afford a house of $501,000.   If the income does not change, this family can afford a $698,000 purchase price if the rate is lowered to 4% (during the subprime)...   In other words, if the household income remains the same, the decrease of mortgage rate would cause the housing price to inflate (manual stimulus) by a significant amount... And once the subprime programs ended (about 2005), the mortgage went back to their standard lending rate (about 6.5%); the affordability dropped, and thus the housing price faltered...   This explains why the $200,000 to $300,000 appreciation from about 2002 to 2006 was merely an artificial inflation...  just a mirage of false excitement...   
 
 
 
 
 
 
NEVER TRUST A REALTOR IF HE/SHE SAYS THAT THE HOUSING PRICE WOULD DOUBLE EVERY TEN YEARS...  Depending on the income and mortgage rate, THE AFFORDABILITY IS ALL RELATIVE...