WSJ's Take On the Week What Weak Home Sales Mean for Investors
11 snips
May 18, 2025 
Jim Egan, U.S. housing strategist at Morgan Stanley, joins the discussion to unravel the complexities of the housing market. He dives into the current challenges facing buyers and sellers amid rising mortgage rates and home prices. Egan explains the 'lock-in effect' dampening housing inventory and evaluates how these factors influence investment strategies. The conversation illuminates the interplay between affordability and consumer behavior, guiding listeners on what to consider in this fluctuating market.
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Housing Market Faces Affordability Crunch
- High mortgage rates and home prices are slowing the U.S. housing market significantly this spring.
- Low inventory and affordability issues are key factors keeping the market subdued despite demand.
Low Rates Lock-in Homeowners
- Most homeowners have locked in mortgage rates well below current levels, discouraging them from selling.
- This "lock-in effect" is keeping supply low and home prices high despite affordability challenges.
Home Equity Could Boost Spending
- Homeowners have accumulated record levels of equity, creating potential for increased home improvement spending.
- Accessing home equity could stimulate spending if mortgage rates decrease or borrowing conditions improve.