Mortgage rates have not been this high since before the housing crisis. And while the housing market is slowing, prices are still high. One reason why is that inventory is also falling, many people have cheap mortgages and are not looking to sell. The figure below plots the house price index and inventory in New York state. It shows prices keep rising as inventory has been falling since the pandemic. Demand for homes may be softening, but until there is more supply on the market, prices may hold up somewhat.

Source: FRED

Allison Schrager is a senior fellow at the Manhattan Institute. Follow her on Twitter here.