The housing market has been keeping its head down, keeping calm, and carrying on in the face of the biggest rate spike since the 1980s. The ability to ignore higher interest rates is nothing new for home sales. In fact, sometimes we see almost no reaction in sales numbers when rates rise. The following chart shows several of the biggest rate spikes of the past decade (and yes, they do look small in comparison to 2022). While there is perhaps some small impact on new home sales, it’s minimal at best. Perhaps home price stability had something to do with that, or perhaps those rate spikes weren’t big enough to have a major impact in their respective home price environments. Perhaps sales were simply still experiencing a rebound effect from the housing crisis. Whatever it was that accounts for the resilience in the past, it’s clear that something new is happening right now. Moreover, it is happening QUICKLY. Just last month, New Home Sales were still at 763k, a level not seen between the housing crisis and the pandemic. Now in today’s new numbers from the Census Bureau, New Home Sales have plummeted to the lows seen only a few times in the 3 years leading up to the pandemic. Let’s not overcomplicate this: whether we’re talking about new or existing homes, prices have surged at the fastest pace on record. This has occurred in spite of wages growing at nowhere near the same pace.