It’s hard to sell your house when you’ve got a magical 3 percent mortgage. From Wolf Richter at wolfstreet.com:
They’re not listing their homes because they’re not moving out because they’re not buying a home to move into because they don’t want to give up their 3% gift from God.
The exact numbers are hard to nail down, but we can guesstimate from the figures we have that the entire housing market, both buyers and sellers, has shrunk this year by about 20% to 25% compared to pre-pandemic years.
Meaning 20% to 25% less demand and sales and 20% to 25% less inventory and new listings, with prices down a tad year-over-year, showing that the market is roughly balanced at this smaller size because buyers and sellers have vanished in equal number.
And we know who they are: the homeowners in 3%-mortgage jail that now cannot buy, and therefore cannot sell.
The 3% mortgages that a lot of homeowners now have after the huge refinancing boom during the pandemic prevent those people from buying a new home because they might have to finance it at about 7%, which would increase the monthly payment on the same size mortgage by 50% or more.
The views and opinions expressed in this commentary are those of the author and do not reflect the official position of Citizens Journal
TELL YOUR FRIENDS ABOUT CITIZENS JOURNAL Please keep us publishing – DONATE
