Is The Lock-In Effect Starting To Ease?

17.2% of U.S. homeowners now have a mortgage rate of 6% or higher, the highest share in nearly a decade! Why does this matter?

82.8% of homeowners with mortgages have a rate below 6%, keeping many from selling. But the lock-in effect is starting to ease.

What is the lock-in effect? It’s when homeowners stay in their current homes instead of selling because they have a much lower mortgage rate than what’s available in the market.

How does it affect the market? Fewer homes for sale equal a housing shortage. Less mobility equals homeowners delaying moves for job changes, downsizing or upgrading. Rising home prices equals low inventory and keeping competition high.

Homeowners are starting to adjust to higher rates and sell. This means more inventory!

North San Diego County saw an increase of 18.2% in new listings in February. People are starting to make a move.

Source: Redfin and Homedex via NSDCAR