The raising of interest rates by Greenspan will certainly create pressure on those with 3 year option ARM loans etc. However, the demand will also create an outcry for governmental relief. We have already seen the 40 year loan. What's next. If millions are effected by the problem, then you will see rising pressure on elected officials for relief.
Some argue that the housing market has been good for the economy, another factor which could hold a lid on increases or create pressure for reversals.
I don't know what's going to happen, but I'm betting on the demand prerssure to win out. And I'm keeping my three rentals in socal AND building storage facilities.
Excuse me if I don't rely on the government for anything. I saw what happened to people in New Orleans who put their faith in the government relief. The government is so far in debt now that our great grandchildren will never pay it off, and you think that the government can bail this country out of a housing crisis? The whole country? Who is going to pay for that?