Conventional 30 year rates have gone from ~3% to ~5% over the past 3 months while prices have remained steady or have even increased. Over a 30 year mortgage term, and assuming a fixed mortgage amount, this increase in rates represents a nearly 30% increase in total repayments.
The fundamentals have not really changed over the past three months. The outlook for new construction, homes on the market, etc. is still not great. So it seems that this increase in price is driven purely by rate hikes while many maintain that prices will not be coming down by any appreciable measure. Has demand increased so rapidly over the past 3 months that an (essentially) overnight 30% increase in price is representative of true demand and is therefore sustainable in the long term? Was housing therefore simply underpriced for the past 1-2 years?