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The COVID-19 pandemic has intensified these issues. Record-low interest rates encouraged a frenzy of refinancing, leading homeowners to lock in ultra-low mortgage rates, rendering them unwilling to sell their homes. This has severely limited housing inventory, preventing a typical market correction where interest rate hikes would ordinarily lead to a decline in home prices.

Current and Future Market Predictions

Despite increased mortgage rates, which have surged from around 3% to nearly 8%, house prices have remained stable in the face of diminished supply. For first-time homebuyers, this presents an almost insurmountable hurdle. As inflation also rises, the cost of home ownership continues to escalate, blasting previous normative financial metrics out of the water.