The rise in mortgage interest rates increases the cost of home buying for prospective buyers. Adjustments in interest rates for home loans directly affect the repayment pressure on buyers. Therefore, when interest rates rise, the monthly payments for homebuyers correspondingly increase. While this may constrain housing demand to some extent, it does not entirely explain the reasons for rising home prices.

Secondly, the shortage of housing supply is a significant factor contributing to the increase in home prices. In many cities, there is a severe shortage of housing that falls far short of meeting market demand. This may be due to factors such as the inability of new construction to keep pace with population growth and restrictions in government land development policies. Supply-demand imbalances lead to fierce competition, driving up home prices.

Additionally, demand for investment properties also plays a role in pushing up home prices. In times of economic instability or increased expectations of inflation, many individuals view real estate as a secure investment. This increased demand for homes contributes to rising home prices.

However, the increase in home prices may add pressure on homebuyers, especially for young, first-time buyers. In some major cities, buyers need to make substantial down payments, making it challenging for them to handle loan repayment pressures. Particularly during periods of economic instability, the burden on buyers may become even heavier.

Nevertheless, with decreasing mortgage interest rates and a slowdown in home price growth, housing affordability is gradually improving. It is anticipated that in 2024, home prices may decrease by nearly 2%, easing the pressure on potential homebuyers. However, some institutions suggest that if the Federal Reserve continues to lower interest rates, home prices may rise again.

Governments and markets should take measures to increase housing supply, ensuring that home prices remain stable and improving affordability for buyers. For instance, the government can encourage housing development by relaxing land-use requirements and development restrictions. Additionally, the market should focus on developing affordable housing options to meet the needs of the majority.