While sales activity has seen a decline of around 20% compared to the previous year, the underlying factors such as affordability and supply and demand dynamics have not changed much. This reduction in supply has coincided with the existing demand, preventing a significant oversupply in the housing market that would drive down values. As a result, fewer homes are being listed for sale. Currently, the majority of mortgages have rates below 5%, with many in the 3% range, so sellers are reluctant to pay double the interest rate for a change in neighborhood. Most home purchases traditionally come from sellers listing their current homes. The reason the housing market hasn’t come to a halt is because even before interest rates increased, the market was already experiencing a shortage of available homes. I had guessed that we'd see the housing market grind almost to a halt with people hanging on to what they had, and others priced out by rates. Demand for housing seems unabated as well.

I spoke with an economist who suggested, correctly I think, that inflation is still running hot along with overall consumer confidence.

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