Slow wage growth has weeded out many potential buyers, and rising mortgage rates and low inventory levels are incentivizing possible sellers to stay put in their current homes, according to Business Insider.
Even if homeowners want to move, many do not want to risk selling their homes without the guarantee that they’ll be able to acquire a new one. Plus, owners who signed on for incredibly favorable mortgage interest rates don’t want to mess up a good thing.
Now, the likelihood that rates will rise from historic lows has spurred the so-called rate lock-in effect: homeowners don't sell because of the perceived or actual difference in their monthly mortgage payments if they swap their old rate for a new, higher one.
Housing experts quoted by Business Insider expect that tight inventory, high demand, and rising prices will be a “new normal” in the near future.
