Why Home Prices are Remaining High

The availability of homes and the interest rates for mortgages have a big impact on how much houses cost. When there aren't many houses for sale, the prices go up because people have to compete with each other to buy them. On the other hand, when there are lots of houses available, the prices tend to go down. The interest rates for mortgages also matter because they affect how much money people can afford to spend on a house. High rates can make it harder for buyers, and sellers might decide to wait before selling. There's a measure called "Months Remaining Inventory" that shows how many months it would take to sell all the available houses. It's an important clue about whether prices will go up or down. To understand what's happening in a specific area, we need to look at things like how many jobs there are, how the population is changing, and how many houses are being built. When people expect mortgage rates to go down, they often wait before buying or selling, because they think it could affect prices. We're currently facing a tug-o-war between interest rates and inventory. Inventory is tight, creating a scarcity effect, while at the same time mortgage interest rates are keeping probable buyers off the market.