“Normally, we would see prices come down when rates rise as much as they have in the last year and a half, but sellers aren’t budging because they don’t have to — there are so few homes on the market,” said Chris Low, chief economist at FHN Financial.

"It caught the markets by surprise because there was this sense that three months of encouraging inflation data would kind of bring down the temperature at the Fed," said Will Compernolle, macro strategist at FHN Financial in New York.