I get what you are saying, but I think interest rates have a broader impact beyond just monthly payments. Real estate investors will start getting squeezed for example, so demand will dry up there. Also, I think downward prices impact the psychology of the market. Even if those price drops are entirely due to the rate increases (such that the monthly payment is the same), I imagine people will start getting nervous about jumping into a highly leveraged investment with falling prices, I know I would.