Rate-Locked Homeowners: Many homeowners have taken advantage of historically low mortgage rates in recent years and locked in their rates for longer periods, making them less likely to sell their homes and move to a new one. This has resulted in a lower supply of homes for sale, as well as a decrease in the number of buyers who are able to find affordable housing.
Low Housing Inventory: The low inventory of available homes is driven by both the rate-locked homeowners and the fear of not finding something to buy. Many potential sellers are hesitant to list their homes due to concerns about finding a suitable replacement property in a highly competitive market. This has led to a situation where there are fewer homes on the market, which has increased demand and driven up prices.
However, with mortgage rates expected to come down in the coming year, homeowners who previously locked in their rates may start exploring their options for selling their homes and buying new ones. This could lead to an increase in the number of homes for sale, which would help to ease the housing inventory shortage. Additionally, the increasing number of new construction projects in some areas could help to address the housing supply issue in the long term.