The housing market is in turmoil: mortgage rates are at an all-time high, home construction materials are stuck in chocked supply chains, renter outlooks are at all-time lows, home prices continue to increase, and the backlog of approved homes awaiting construction is larger than ever before.

Much of the turmoil has been related to high mortgage rates. After the Federal Reserve raised interest rates for the first time in more than three years this March, the 30-year fixed mortgage rate reached 5%, the highest its been since 2011, roughly two percentage points higher than the same time last year.

These high mortgage rates have contributed to an overall increase in the cost of buying a home, alongside increasingly expensive building materials. Higher prices means fewer first-time homebuyers will be able to afford to enter the market, and fewer construction projects will get underway, despite a shortage of available homes.

According to The National Association of Home Builders Wells Fargo Housing Market index, confidence among single-family homebuilders in the U.S. reached a seven month low recently. Permits for construction on single-family homes fell 1.7% in March, while the completion of single-family home projects fell 6.4%. Single-family housing accounts for the majority of all homebuilding.

On the other hand, construction on housing with five or more units rose 7.5% in March to the highest point since before the pandemic. Even with rents seeing the biggest jump in 20 years the same month, demand for apartments is high as buyers are squeezed out of the market.

It's also worth noting that overall housing starts increased by .3% to 1.793 million units in March, the highest point since June of 2006.

While high mortgage rates have certainly pushed some buyers out of the market- renters have never been more pessimistic about the possibility of future homeownership, some experts say that the dip in construction on homes probably won't last.

"It is too early to assess the impact of higher mortgage rates on home purchases, but it appears that there is still growing excess demand for housing," said senior economic advisor at Brean Capital Conrad DeQuadros. "This suggests that home construction could hold up well even in the face of a moderate pullback in demand."

On the other hand, some argue that the high rates will dampen demand, leading to a glut of homes on the market.

"With so many homes under construction and so many more permitted, it is not clear the market will be able to support all that activity," said chief economist at Naroff Economics in Holland Joel Naroff. "The saving factor is that the existing home market, which comprises over 88% of the sales, has few homes on the market."