The housing market is a complex place at the moment, with the Fed's aggressive rate hikes sending mortgage rates north of 6% for the first time in nearly 15 years. Much of the resulting coverage has focused on the buyers' view of things—how those higher rates add hundreds of dollars to the monthly bill and might put houses out of reach for many. But the Wall Street Journal looks at one market wrinkle from the sellers' side: current homeowners who were lucky enough to get low rates when they bought—even below 3%—and who are now reluctant to sell as a result.
"I like to call it the 'golden handcuffs' of mortgage rates," Odeta Kushi of First American Financial Corp. tells the Journal. "You've got existing homeowners who are sitting on these rock-bottom rates, and what is their financial incentive to move and lock into a rate that's potentially as much as 3 percentage points higher than what they've locked into?" One example might be a young, growing family that a year ago might've been happy to sell and scale up in size. Now, they'll make do and stay put. The end result might be that fewer houses are available to buy, thus keeping prices high even though demand might be dropping (because of those higher rates).
Kushi also talks to Yahoo Finance and makes the same point. "On the supply side, you can't buy what's not for sale," says Kushi. "Sellers are sitting tight right now because they're locked into these historically low mortgage rates and they don't have the financial incentive to move." One industry analyst tells Marketplace that the dynamic already is playing a role in keeping prices high. Many expected prices to start dropping in a hurry once rates started spiking, but it hasn't happened. "We don't have enough inventory," says Lawrence Yun with the National Association of Realtors. (More real estate stories.)
,
uBlock 
,
and
Ghostery 
)
