While the rate increases affect affordability, they also act as an incentive for homeowners thinking of moving to stay put. The cost of buying up has become the increased price of the house plus the incremental increase in the payment form the higher rates. More homeowners deciding not to move/move up is going to further reduce inventory in already tight markets. Hard for me to see prices coming down much with the tightness in inventory in my market (Northern California), unless the economy really slows and/or rates go north of 6%.
While the rate increases affect affordability, they also act as an incentive for homeowners thinking of moving to stay put. The cost of buying up has become the increased price of the house plus the incremental increase in the payment form the higher rates. More homeowners deciding not to move/move up is going to further reduce inventory in already tight markets. Hard for me to see prices coming down much with the tightness in inventory in my market (Northern California), unless the economy really slows and/or rates go north of 6%.