Interest rate hikes drive down home sales
New listings of properties
continued to drop in November, suggesting homeowners are adjusting to sharply higher
interest rates and have not been forced to sell their homes. The fact that the supply of homes for sale
has remained low, has supported average selling prices in the $1.08 to $1.09
million range since August.
The rise in borrowing costs is a short-term shock to the real estate
market. The rate shock will likely wear off later in 2023 as we start to see
the impact of record population growth start to have a greater effect. To a
certain degree we are already seeing this in the rental market with extremely
tight market conditions and double-digit rent growth.