things might get worse
What Everyone's Getting Wrong About The Housing Market
The rise in mortgage rates has both buyers and sellers playing the waiting game. They could be making a grave mistake.
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The Lede
There's a popular saying in real estate: "Marry the house, date the rate." In other words, you're stuck with the home you buy, but mortgage rates are fickle — you borrow money at one rate, then someday you refinance and get a better one, shaving hundreds of dollars off your monthly payments. Like hopeless romantics waiting for something better to come along, these wannabe homeowners could be making a grave miscalculation.
Key Details
- Homeowners don't want to give up the loan terms they scored a few years ago, and potential buyers just watched their spending power plummet, so both groups are hanging out on the sidelines.
- Everyone's talking about the "lock-in effect," or the idea that would-be sellers aren't putting their homes on the market because they have such good mortgage rates.
- If borrowing rates do end up falling this year, it could trigger bidding wars and the frenzied dealmaking that defined the pandemic-era housing boom.