House Prices & Mortgage Rates

The affordability vice: prices (Case-Shiller, left) against the cost of financing them (30-year fixed, right). The 2022 anomaly — rates doubling while prices barely dipped — came from rate lock-in: nobody sells a 3% mortgage to buy a 7% one, so supply vanished alongside demand.

For the macro picture, shelter is the stickiest large component of CPI, so this chart feeds the inflation chart with a ~12-month lag. Falling rates with resilient prices re-ignites the wealth effect; falling prices would be the deflationary tail risk.