Prices are affected by demand and supply. Supply can be constrained enough (through zoning, less construction) to still be less than demand in a high interest r

Prices are affected by demand and supply. Supply can be constrained enough (through zoning, less construction) to still be less than demand in a high interest rate environment. Demand is also an interesting one, the population continues to increase and every year a new, larger, cohort of people enter the housing market. Many are seeking to live in the relatively few areas that have strong, dynamic labor markets, and are willing to pay a higher share of income to achieve this. A lot of housing markets have experienced this effect on both supply and demand and prices have not decreased in line with what the basic models predicted.