Here’s a contrarian take you won’t often hear: changes in interest rates don’t determine whether home prices rise or fall—they interact with a bunch of other forces that can easily overpower them. Look at long-run data on the 30-year mortgage rate and national home-price indexes and you’ll find periods where rates and prices moved together, and others where they diverged. Rates change the cost of money, but prices reflect local supply, demand, incomes, expectations, and policy. See the long history of mortgage rates from the St. Louis Fed, alongside broad home-price gauges like the FHFA HPI and the S&P CoreLogic Case-Shiller index. (FRED, FHFA.gov)
Why the disconnect? First, inventory and construction are often the binding constraint. When supply is scarce—thanks to zoning limits, labor/material bottlenecks, or homeowner “rate lock”—prices can remain sticky even as borrowing costs rise. Research roundups and policy work (Urban Institute, BIS, and the ECB) emphasize that sensitivity of prices to rates depends on credit conditions and—crucially—how elastic supply is. In tight markets, rate hikes can cool sales volume far more than they dent prices. (Urban Institute, Bank for International Settlements, European Central Bank)
Recent U.S. data fit this pattern: appreciation slowed after 2022’s rate surge, but nationally many price indexes still show positive year-over-year readings rather than broad declines. That’s consistent with the idea that rates are just one variable in a bigger equation of income growth, expectations, and inventory. For deeper dives, see the New York Fed’s Liberty Street Economics housing posts. (Urban Institute, FRED, Liberty Street Economics)
Zooming into Westchester County—and especially Chappaqua, New York—local supply constraints and school-district demand often dominate the narrative. Trade association stats show Westchester remained highly competitive into 2025, with median prices edging higher despite higher mortgage rates—classic evidence that “Westchester Real Estate” dynamics can overpower national rate cycles. (Hudson Gateway Association of REALTORS®)
If you want more local texture, we’ve written about these patterns before: our archive posts “How Was the Westchester Real Estate Market in 2018?”, “The Westchester Real Estate Market in 2019,” “Buyer’s Season in Westchester County Real Estate Starts Now,” and “A Tale of Two Markets” all document periods when segment, price tier, and inventory—not just rates—drove outcomes in Westchester and Chappaqua. (nestedgerealty.com)
Bottom line: Rates matter for affordability and volume, but home prices are ultimately set where local demand meets local supply. In places like Chappaqua, where buyers prize schools, commute, and lifestyle—and where building is hard—prices can shrug off rate moves for surprisingly long stretches. For the data-minded: compare mortgage-rate history, FHFA’s repeat-sales methodology, and regional reports to see how these forces interact over time. (FRED, FHFA.gov)
