My personal crystal ball says prices will keep rising, but only about as fast as inflation for a few years. They may even stagnate. I don't think the interest rates will have too big of an effect. That's just my random opinion, of course.
But demographics, man... all the crazy apartment building the last 5 years has been to house that huge cohort of 19-29 folks. They are going to be having kids and buying houses soon. If I was some huge company, I'd be finding a way to bet on price increases in desirable (ie walkable/urban) locations and stagnant rents in the next decade or so.
-W