“As homeowners are “locked-in” to their current mortgages”
Kind of. The problem, of course, is that when the payments increase by 50% (at least) for the same house, at the same price, then the pool of buyers becomes MUCH SMALLER for the sellers...plus the value of their homes has dropped, whether they like it or not, but they will know it, as they learned in 2008.
the long-term average of 7.74%
Normally I would make extra payments to get rid of the note earlier.
In this case, extra payments go to treasury securities paying almost 5 1/2%.
My mortgage companies don't like my loans in the least.
The story seems to imply the wrong things. When the study was done, people with mortgages above 5% were twice as likely to say they would move soon. But those are people who already have moved in the past 3 years. 5% will not be the magic number if the fed raises another full point. The magic number will likely go up a full point. But There are people who have to move for some life reason. There are people who don’t need a mortgage. And there are those people who bought a house to rent or flip. They all have different reasons to move.
Right now there is a higher percentage of investment purchasing of homes. People or companies by up homes to rent or AirBnB. This new group of home investors are the reason that there is a shortage. If they leave the market prices would come down in a hurry. But people would complain about that too.
The “upward pressure” on prices is pure inflation, caused by Congressional spending insanity.
I can tell you, we had been planning on moving for over a year. I had two different trips to both Colorado and Tennessee for job interviews, and both places offered me work, and about a $20,000 increase in pay. But, the housing market is so inflated, that even with that increase, I still would have lost money, or just broke even, after factoring in the new mortgage/rent payments. All of our increased wages would have went into housing, and it might not have been enough to cover it. So, I decided to just stay here in my very nice house with a sub %3 interest rate and only 9 years left, even though I don’t make much money here.
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The interest rates are killing independent boat dealers. This includes not only the high interest rates for individual boat purchases but also the rates for boat dealer floor plans. Boat dealers cannot sell inventory or keep it. Many boat dealers have failed, are failing or will fail.
The lockdown for Covid combined with hyper-inflation due to insane money printing/borrowing is going to trash this county for a long time.
Why would you sell your home in a high interest rate environment, unless you had to do so? Getting a new home will require an even higher rate to finance. I can’t think of a dumber move, if you have a choice.