10/14/2026
"Mortgage rates are going up, so home prices have to come down."
I'm always cautious when I hear that. Here's why your neighbor's mortgage rate matters more than you'd think.
Last week I talked about supply and demand. Higher rates make borrowing more expensive, which can reduce buyer demand. That part is real.
But rates affect supply too.
Imagine your neighbor bought or refinanced when rates were much lower. Selling usually means giving up that rate and taking on a new mortgage at today's rate. For a lot of homeowners, that's a pretty good reason to stay put.
Fewer sellers means fewer homes coming to market. And when supply stays tight, even reduced buyer demand can still be enough to support prices.
That doesn't mean prices can't soften. Rates matter, but they're one part of the equation, not the equation itself.
Real estate is local, and it still comes back to supply and demand.
Do you know anyone who's staying put because of their rate?