By Wolf Richter for WOLF STREET.

The dynamics in the housing market are now sort of messy: The lowest demand for existing homes since 1995 has led to rapidly rising active listings, as buyers are on strike because prices are too high. Homebuilders have been building single-family houses at breakneck speed, creating the biggest pile of unsold completed houses since 2009, and they’re throwing around massive incentives, including mortgage-rate buydowns, to move the inventory.

Mortgage rates, which have risen on renewed inflation fears since the Fed started cutting rates, are back to the old normal, before the era of QE started in 2008, and Fannie Mae’s CEO said that people should get used to them. To top it off, renting a nice single-family house is now far cheaper than buying an equivalent house after the mindboggling spike in home prices and the now old-normal mortgage rates.

So, prices in many major metropolitan areas, even in San Diego and Los Angles, have started to sag.