Two factors are behind the jump: rising interest rates on mortgages and skyrocketing housing prices. The average rate on a 30-year fixed-rate mortgage has nearly doubled since the beginning of the year to hit 6.70% last week, its highest since 2007, according to Freddie Mac. Coupled with the pandemic-era ballooning of property prices, monthly mortgage payments on newly-bought homes have soared. Little wonder that those who locked in a good rate and a nice low payment at some point in the past are loath to give that up. That’s a major reason why the supply of new homes for sale has remained depressed, Mark Fleming, an economist at real estate title and services company First American, wrote in a recent blog post. “Sellers have largely been staying put, given many enjoy a mortgage rate that may be nearly three full percentage points lower than the current market for mortgage rates,” Fleming wrote. “Since home sellers are also prospective homebuyers, homeowners choosing not to sell has reduced housing market potential.” Have a question, comment, or story to share? You can reach Diccon at dhyatt@thebalance.com.
