Number of Homes on the Market in San Francisco Jumps

If interest rates go up, it becomes harder to borrow money to purchase a home. When it becomes harder to borrow money to purchase a home, demand for homes goes down and inventories go up. When inventories go up, prices go down. After prices go down enough (to what is equally affordable with the new interest rates), sales go up and inventories go down.

Last week there was a Washington Post story [1] about how home affordability was hurt by the higher rates, but it feels like that was just part of what should be an expected chain of causes and effects.

(Granted, none of this is happening in isolation, but my gut feeling is that interest rate changes are the most important factor to consider right now).

[1] https://www.washingtonpost.com/business/2023/08/12/millennia...