When mortgage rates started to increase last year, there was fear that home prices might soon crash. The expectation was that buyers would retreat and declining demand would cause values to tumble. That fear, though, seems to have been unfounded. There were declines, of course – in some locations more than others – but prices overall held steady and even began climbing again earlier this year. But can we say for sure that home prices bottomed? According to one recent analysis, it looks that way but may be too soon to say. The lack of available homes for sale combined with continuing demand from buyers has largely kept prices afloat. That dynamic doesn't seem likely to change in the near future. However, the analysis makes clear that mortgage rates have remained high and continue to cause affordability challenges for home buyers. Where affordability heads from here will determine whether or not prices adjust somewhere down the line.
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