I think the reality is that there is not yet enough sale pressure. So units are not coming to market. This will likely change when the recession actually hits.
This is most of it, right here. Home sales will be normal when interest rates are stable. If they drop, home sales will stay normal or rise, because you can "get out of your high rate loan AND upgrade" at the same time.
But now, when rates are climbing? You'll be selling your house AND your 3% mortgage to buy a ... 7% one? Since "selling your house and buying it back" would result in a larger monthly payment (swapping the loan from 3% to 7%) the first thing we should expect to see is sales slow down. After they've slowed down for awhile, the prices might begin to drop - if people need to sell.
