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Why Home Prices Are Still Rising Despite Higher Mortgage Rates – A Lending Expert’s Perspective

Real Estate Market
October 24, 2024•2 min read

Why Home Prices Are Still Rising Despite Higher Mortgage Rates – A Lending Expert’s Perspective

By: Charles Power, Lending Expert

Over the past several years, many people have predicted a steep decline in home prices as mortgage rates rise. Yet, here we are in 2024, and despite higher rates, home prices haven’t crashed. As a lending expert, I’ve seen these forecasts come and go, and I want to break down why home prices are still holding firm.

This isn’t a new story — since 2012, there have been continuous claims of an impending housing crash, often tied to economic shifts, interest rates, or doom-and-gloom narratives. In fact, some of these predictions date back more than a decade:

- 2012: Shadow inventory

- 2013: Rising mortgage rates

- 2015: Manufacturing recession

- 2022: 7% mortgage rates

- 2024: Higher rates, rising inventory, and even off-the-wall factors like sexless men or credit card debt

None of these have led to the catastrophic market downturn that some people eagerly anticipated. Instead, they’ve often missed key fundamentals of the housing market. The truth is, home prices rarely drop in a significant way. If we look at history, since 1942, we’ve only seen a few years with price declines, and outside of the 2007-2011 crisis, home prices have remained resilient.

So, why haven’t home prices crashed in 2024, even with higher mortgage rates?

The answer lies in basic market principles: supply and demand. To see a significant drop in home prices, we’d need a huge surge in inventory or a flood of distressed sellers. However, the current rise in housing inventory has been calm and steady, not a flood. According to the National Association of Realtors, home sales dropped only 1.0% from August to September 2024. Year-over-year, sales are down just 3.5%.

In essence, while rising rates have cooled the market, they haven’t created the conditions for a full-blown crash. Demand is still strong, and inventory remains manageable. The idea that higher mortgage rates alone will cause home prices to plummet ignores the complexities of the market.

As we move forward in this high-rate environment, it’s essential to stay informed about market conditions and consider alternative financing options. Whether you're buying, investing, or refinancing, private lending offers flexibility and speed that traditional lenders often cannot match. At Power Lending Partners, we're here to help you navigate these shifting market conditions and find the right solutions for your financial needs.

– Charles Power, Lending Expert

Check me out here

A quick introduction: My name is Charles Power. I am a father of six and recently became a grandfather. We are a modern-day Brady Bunch— I have two daughters, my wife has three sons, and together, we have our youngest child. We currently live in Las Vegas, NV, where we are active in our community, church, school activities, and fitness. I have been in the mortgage and lending industry for nearly 10 years and have loved helping families with their largest investment: their homes. Recently, I established my own brokerage, and I now have the ability to finance private money for investments, as well as provide business capital.

Charles Power

A quick introduction: My name is Charles Power. I am a father of six and recently became a grandfather. We are a modern-day Brady Bunch— I have two daughters, my wife has three sons, and together, we have our youngest child. We currently live in Las Vegas, NV, where we are active in our community, church, school activities, and fitness. I have been in the mortgage and lending industry for nearly 10 years and have loved helping families with their largest investment: their homes. Recently, I established my own brokerage, and I now have the ability to finance private money for investments, as well as provide business capital.

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