30-year mortgage rates are near 8% with excellent credit. Interest rates have climbed for the past three months straight. The Fed is considering another interest rate increase for November and December, possibly pushing rates up to 8.5% or even 9%. The reasoning is that higher interest rates will "slow down inflation".
Home sales are at a 13-year low. Factor in the higher cost of insurance and the fact that property taxes are going up to unaffordable levels and the very high cost of labor and materials for home construction... and you have a real estate market that's going to crater.
I personally know several homeowners that had their homes listed for sale, but have removed them from the market in the past 2 months. They will wait and hold on to what they have for now. One real estate agent mentioned to a couple that they should keep their house off the market until at least middle of next year and then decide based on market conditions.
I'm suggesting that the U.S. economy is a three legged stool... and one of those legs is housing and private & commercial real estate. If it fails, the economy goes into a deep recession at best.
The PBD Podcast has talked a lot about this. Part of the issue is the sheer number of people who currently hold low interest rate mortgages. The percentage of people that have a rate < 3% is quite high. They are staying put and that has an affect on supply.
That said, I was in the areas that are considered "wealthy" in Silicon Valley over the last couple of weeks - Woodside, Atherton, Menlo Park. The sheer amount of home construction is amazing. It is Versailles 1788 around here. No wonder no one can get anyone else to come out to do minor repair jobs unless you pay at least $500-$1000. They are all down in SV. One guy told me the going rate for labor for pavers is $25 per square foot. That is not including materials. It is insane.