We have planned to buy a house but with such high rates that did not happen. We would have to wait until rates are lower. I planned to use the down payment money to invest in Ig 3-5y corporate bonds or etf on such bonds. That way when rates go down, this is the time when I need money to buy a house and I will sell my bonds with price appreciation. Is there a possible problem with this strategy? It seems like the timing of rates going lower will work in favor for my investments. I assume either bonds themselves or etf on them should give me premium payoff.
Yes there is a possible problem. If the price of real estate increases faster than the interest rate of your bonds (or other investment vehicle) over the time range until interest rates go down to an acceptable level for you, then your down payment will no longer be enough to buy a comparable house.
Relying on this money to keep up with the housing market risks keeping you priced out forever. A better way to view things is that you can no longer afford a house. You're back at saving for one. Set a time horizon and use appropriate investments (which might or might not include bonds) for that.