Although I do feel that interest rates are something potential home buyers may look at, and it may help other home owners decide whether to move up to a larger home, I do not think it is that much of a motivator in the final decision whether someone chooses to buy or move. I think it works the other way around, people consider buying or moving due to a number of reasons, and then then look at interest rates and other factors to see if they can afford it, and that it makes sense. If they can afford it, they move ahead, whether rates are high or low, but if they can't afford it, they will decide not to move. Interest rates only play a factor based on affordability, not whether the rates are high or low. I guess what I am trying to say is I don't think people watch interest rates, then decide whether to buy a home or move based on what the interest rates are doing.
Interest rates are what they are at any given time, and there are certainly other factors that play a much larger role whether someone buys a home; things like a new job or job transfer, a pay raise, a marriage or divorce, a pregnancy, children growing up, or older children moving out of their home.
I personally have never had anyone looking to buy a home decide to change their mind and not buy because the interest rate went up last week. I also have never had any client call me and say, "Hey, interest rates are low, I think I want to buy a house today. After all, rates may be going up tomorrow."
I think agents use interest rates as a marketing ploy to try and sell homes. When interest rates are low, agents say "buy now" before interest rates go up. "Rates will never be lower". Then, when interest rates are high, agents still say "buy now" before rates get any higher. That is always the scare tactic they use.
I have never heard an agent say interest rates are high, nobody buy a home right now. Or how about, interest rates will be decreasing next year, why not wait to buy for another year or two.