Continuing increases in home prices across the country are likely run into rising interest rates in coming months. So far the upturn in home prices and overall housing activity has been supported by a combination of low mortgage interest rates and investor buying of homes to rent. This combination has supported strong price gains across the country, but it won’t last forever. Comments from Fed Chairman Ben Bernanke on June 19th at his press conference following the latest policy statement from the central bank suggest that the bottom in interest rates may be behind us and that QE3, the Fed’s current supportive policy, is likely to slow down this fall and vanish completely by sometime next year. Even modestly higher interest rates are likely to dampen some home buying. Further, investor buying for rent led by private equity firms isn’t likely to take up the slack. The size of the investor-buying isn’t big enough to matter except in a few concentrated markets while rising home prices and interest rates will hurt the economics behind the run to buy blocks of houses for rentals. The first hints of what may be ahead may show-up in next week’s S&P/Case-Shiller Home Price report on Tuesday morning at 9 AM.