The paper analyzes the impact of an unanticipated rise in interest rates byone percentage point on housing price changes per assumed scenarios after thesampling period is divided into the periods in which interest rates, purchaseand jeonse prices are on the rise and on the decline respectively. It uses thedata from 1991 to date. According to the empirical results, when the period inwhich interest rates increase generally overlaps with the period in whichhousing prices decrease, a positive shock for interest rates by one percentagepoint has a biggest impact on the decrease in housing price changes. Jeonseprice changes also respond to a positive shock for interest rates moresensitively than purchase price changes during the period in which interestrates are on the rise. The results are similar, even though macroeconomic andfinancial variables such as industrial production, consumer prices, KOSPI, andwon/dollar exchange rates are considered as control variables. The mainconclusions hold when dummy variables are used for the currency crisis andglobal financial crisis periods, as well as for the periods in which LTV and DTIrestrictions are introduced. Therefore, given the recent economic situation ofG2 and the relative seriousness of domestic household debt, the monetaryauthority, who plans to increase the policy interest rate, need consider theinterrelationship between interest rates and housing prices.