Six months ago, separate friends of mine who know each other bought some residential real estate. We got into a four-way text conversation in March as rates crept up about the impact of rising rates on real estate. Did the basic math to calculate the erosion in financing power that the move from 2.5% to 3.5% or whatever had generated; and the difference between what loan/property someone might afford with an ability to spend $3k/month on a mortgage payment. Told ‘em prices must go lower. Fourth buddy agreed emphatically with basic math, but the other two insisted somehow magically purchasing power would prove robust & sticky. Didn’t matter for their small rental properties per se - although, their capital is definitely stuck at cost… indefinitely. It’s just an anecdote about people, capital, hope & math.
Your chart is about people, capital, math & despair.