Home prices are at an all time high so according to supply and demand, that means suppliers will supply more homes due to the high prices. Demand for a house on the other hand is also at an all time high. I really am confused on why demand is high when prices are high. From my understanding of demand and supply when supply is low, demand will be high and so will prices. When the price is high, supply is also high but the demand is low.
There are some articles saying supply is low which is why home prices are at an all time high. But that doesn't make any sense to me since home prices are very high right now so it incentivize suppliers to make more to provide for the buyers. Also, bidding wars are very common when supply is low, but there is lack of bid wars happening in the housing market.
My questions are:
Are the principles behind demand and supply pointless in this scenario?
How come demand for a house is very high but the prices are high and the supply seem to be relevantly adequate?