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Originally Posted by G35POPPEDMYCHERRY
any thoughts as to why housing prices are increasing or staying the same after the price hikes even with interest rates rising...isn't it supposed to decrease? also what happens when things normalize and everyone is upside down...also any ideas or trends to why this housing market and rent is so expensive and holding
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I think part of it is that people with 2-4% mortgages aren’t selling and builders may be slowing down the pace of new construction. Additionally, there are still cash buyers out there. Therefore, even though some buyers have decided to wait due to rates, there was a big imbalance previously due to lack of available inventory before the rate hikes and there are reasons inventory will remain constrained, so we don’t necessarily need a huge decline in prices to find something closer to equilibrium. Just need some buyers to step away from the market. It’s not like post-2008 when the market was flooded with inventory due to foreclosures and short sales. Obviously, factors vary by market and the effects will only last so long. People will always need housing and higher rates don’t really change that fact.