The U.S. housing market is caught between deteriorated affordability caused by rising mortgage rates and a scarcity of existing inventory. This leads to downward pressure on home prices on one side and upward pressure on prices due to the lock-in effect. The unexpected increase in mortgage rates has decreased buyers' purchasing power and made homeownership less affordable, leading to a correction in home prices. Additionally, the lock-in effect has created a shortage of available homes as homeowners are hesitant to sell, intensifying competition among buyers and driving up home prices. Whether affordability or inventory scarcity will dominate the housing market remains. While firms like Zillow and CoreLogic predict rising prices due to limited inventory, economist Mark Zandi of Moody's Analytics anticipates improved affordability over time with gradually declining mortgage rates, leading to a potential 8% fall in national house prices from their peak.