Surging mortgage rates have brought the housing market down from its giddy highs earlier this year. Now the question on everyone’s mind is how low will building, buying and prices go? We’ve already seen people who follow the market speculate about housing prices falling 10% or even 20% from peak levels.

But that kind of shock-and-awe analysis is incomplete, and based on an assumption that housing affordability has to snap back to pre-pandemic levels, or match some theoretical monthly payment-to-income ratio. A better guess about where the housing market will stabilize would take into account the fact that housing activity was still just fine up until April, even though affordability was much worse than pre-pandemic. You also would need to account for the squiggles in the data as mortgage rates have moved up and down since then.