U.S. home prices continue to rise, even as high mortgage rates keep many potential buyers on the sidelines. The phenomenon has puzzled many market watchers, but real estate experts explain this is largely due to a persistent supply shortage. With fewer homeowners willing to sell and give up their low-interest mortgages, inventory remains tight. This scarcity creates a misleading picture of strong demand because even minimal buyer activity is competing over limited housing options, driving prices higher.
Adding to the complexity, many homeowners who purchased houses at historically low interest rates during the pandemic are staying put, further restricting supply. As a result, even though affordability is strained and sales volume has dropped, the imbalance between supply and demand continues to prop up prices. Analysts warn that without an increase in new listings or significant shifts in rates, the affordability crisis may persist.
Read more about Arizona home prices.