1187 - With Mortgage Rates Set To Drop, Will This Be the Year Sellers Come Back? Here’s What the Data Says by Lindsay Frankel
BiggerPockets Daily
English - January 14, 2024 07:00 - 12 minutes - ★★★★★ - 284 ratingsInvesting Business Entrepreneurship real estate success financial freedom financial independence wealth wholesaling money landlord realestate real estate investing Homepage Download Apple Podcasts Google Podcasts Overcast Castro Pocket Casts RSS feed
Most homeowners bought their homes at mortgage rates that were lower than today’s, and that’s caused what’s known as the “lock-in effect.” Homeowners are hesitant to give up their cheap mortgages, which is suppressing available inventory. Low inventory has kept home prices from falling significantly, even as homebuyer demand fell due to rate hikes.
With mortgage rates down more than one percentage point since their peak in October, the housing market is starting to show signs of rebounding demand. But at what point will the lock-in effect break? And what will happen to housing prices if it does?
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Most homeowners bought their homes at mortgage rates that were lower than today’s, and that’s caused what’s known as the “lock-in effect.” Homeowners are hesitant to give up their cheap mortgages, which is suppressing available inventory. Low inventory has kept home prices from falling significantly, even as homebuyer demand fell due to rate hikes.
With mortgage rates down more than one percentage point since their peak in October, the housing market is starting to show signs of rebounding demand. But at what point will the lock-in effect break? And what will happen to housing prices if it does?
Learn more about your ad choices. Visit megaphone.fm/adchoices