Rate Expectations
Planet Money
Mortgage Rates Lock People In
Mortgage rates have steadily declined over the past 40 years, creating a situation where many homeowners are 'locked in' to low, historically favorable rates. As of March, nearly 60% of borrowers secured rates at or below 4%, resulting in a significant number choosing to remain in their homes rather than relocate for job opportunities or family reasons. This trend disrupts the natural housing cycle where individuals typically progress from renting to buying their first home, and eventually moving up to larger homes as families grow. The reluctance to move not only impacts the homeowners' personal decisions but also affects the broader housing market dynamics, creating a ripple effect that influences availability and mobility for others seeking housing.
