Yahoo! Finance: Inflation keeping house prices high, even with rising mortgage rates

(January 24): Besides the record level of inventories, one of the main culprits for the even higher rise in house prices is inflation, Yahoo! Finance reported.

“How are you [inflation] keep them positive. I don’t expect to see 18% price appreciation,” said Doug Duncan, chief economist at Fannie Mae. Yahoo finance. “But we expect house prices to be positive.”

Now that the 30-year fixed mortgage rate for the week ending Thursday has fallen from 3.45% to 3.56%, some buyers may be hoping a cooling is imminent. It’s an unlikely scenario, Duncan said, Yahoo! Finance reported.

“The history of the relationship between interest rates and house prices is largely misunderstood,” he said. Duncan.

“House prices and interest rates are not correlated,” Duncan said. “What correlates to interest rates is the number of homes sold.” Yahoo! Finance reported.

Even with low inventory, home sales were the highest in 16 years in 2021.

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