Rather than causing home prices to tumble, the sharp rise in mortgage rates over the past two years has bolstered the U.S. housing market by curbing the supply of homes put up for sale. That supply-demand imbalance is likely to continue, in our view, supporting further home price appreciation and rental inflation. Several factors have constrained supply, including the "lock-in effect" by which homeowners with low mortgage rates are reluctant to sell to buy another home at a much higher rate. We believe this effect will persist. The construction of multifamily housing is also expected to decrease over the next few ... (full story)