Why are home prices in the USA remaining high despite interest rate hikes?
Why are home prices in the USA remaining high despite interest rate hikes?
Home prices in the U.S. remain high despite interest rate hikes due to several factors. There’s a shortage of homes for sale, as many homeowners are reluctant to sell with high mortgage rates. At the same time, strong demand in certain markets, like tech hubs or sunny states, keeps prices elevated. Wealthier buyers can afford higher rates and continue to drive demand, while rising rents push some renters to buy instead. Real estate investors are still active, further boosting demand, and high construction costs, driven by inflation, keep new home prices elevated. These factors, combined with historically low mortgage rates, help sustain home prices despite higher borrowing costs.