The relationship between declining mortgage rates and housing inventory remains contentious among market analysts. While some argue that lower rates release supply by reducing lock-in effects, others contend that surging demand will dominate any increase in listings.
Our analysis of seven rate-decline regimes since 1982 reveals an unexpectedly complex pattern. The correlation between rates and inventory proves significant only during periods of economic weakness—and even then, the directional relationship varies unpredictably across episodes.
