Homeowners are Staying Put, but Mortgage Rates Aren't the Only Reason

It’s not just mortgage rate
Less than 6% of all mortgage borrowers are delaying a move due to lock-in effect.[1]
 
The lock-in effect is the theory that existing homeowners are hesitant to move because they’re locked in to a lower interest rate than current market rates.

While having a low rate is a factor, there are other reasons homeowners don’t want to sell.
 
29% of mortgaged homeowners plan to stay in their homes longer than originally intended.[1]
Primary reasons homeowners don't want to move[1]: 21% Mortgage rate is lower than current rates, 19% Like the home/location, 13% Home prices are too high to buy, 13% Job/family nearby
Generational trends are also a factor: 80% of Baby Boomers want to age in place, which represents nearly 1/3 of housing supply.[1]
 
A decline in mortgage rates may not be enough to boost listings. Lower home prices and more construction are also key to closing the inventory gap.
 
Housing Market Shows Positive Signs Heading Into the New Year
Mortgage rates declined every week in November.[2]
Average Weekly Mortgage Rates[2]: Nov. 30 7.22% 30Y FRM
Purchase applications progressively increased throughout November.[3] Median list price lowered in October and held steady from a year ago.[4] $425,000 (down $5k MoM)
 
New-home construction rose for both single-family and large multi-family homes in October.5
 
Total housing starts annual rate: 1.37 million*, One-unit construction annual rate: 970,000*, Multifamily construction annual rate: 382,000*
More first-time buyers entered the market this year.[6] 32% in 2023 (Up 6% YoY)

 

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