We have a convoluted market where there's not a lot of demand and people aren't actively looking to sell, but prices are still up." "You'd have to buy a house worth tens of thousands of dollars less to pay the same monthly rate. "A 3% difference on a mortgage is gargantuan," Channel said. Nearly one-quarter are sitting on a mortgage rate of less than 3%, close to the highest amount on record. This population makes up a significant portion of homeowners. For many people, leaving a sub-3% mortgage behind and inking one around 7% is a non-starter, even if they get a big windfall from a sale. Even if a seller is able to offload at a lofty price, they still have to navigate the tight market as they seek their new home. Higher rates aren't just deterring new buyers - they're also scaring sellers from putting their homes on the market. "Relative to where we were during the pandemic, prices will probably stay high for some time compared to recent history." Current homeowners are locked in "The housing market is weird right now," LendingTree's senior economist Jacob Channel told Insider. That's kept prices from falling, even as demand gets slammed by higher mortgage rates. A wave of people locked themselves into ultra-low mortgage rates, creating an inventory shortage. The explanation boils down to a unique set of circumstances that have unfolded in a distorted post-COVID world.
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