After bottoming out below 3% in January 2021, the average rate for a 30-year, fixed-rate mortgage now sits above 7% — which is just too high for many homeowners to consider selling.
At today’s rates, most homeowners would need to finance a new home at a higher rate than the rate they currently hold, adding hundreds of dollars a month to their mortgage payment. That has created an incentive to stay where they are.
“Even if they bought a cheaper house, their payments would go up,” said Nicole Bachaud, a senior economist at Zillow.
“These existing homeowners either can’t or are unwilling to sell their home because they can’t afford a mortgage on a new home,” Bachaud said.
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