How are average house prices in most Western countries rising, even while interest rates are increasing?

Question

I’m a layman, not an expert by any means but wouldn’t interest rate increasing mean spending, including buying property, decrease? Would that not mean that house prices would fall to intice more spending?

I understand currently interest rates are normal zing or falling but hasn’t this been the case for many years now since COVID lockdown?

In: Economics

Answer 1

Interest rates are a factor, but not the only factor. Household income and willingness to pay also play a role, as does housing supply.

If you have income and willingness to pay go up, and supply go up, and interest rates go up it’s then a juggling match between those factors.