Current mortgage rates are in the high 6% range, and returning to sub-3% levels seen during the pandemic is deemed unrealistic. However, a decline to below 6% could encourage homeowners to sell. The housing market is largely stagnant due to existing homeowners locking in low mortgage rates, with many reluctant to sell. Economists note that while a significant drop in rates is needed to spur mass selling, a smaller decrease may incentivize enough homeowners to list their properties, thus revitalizing the market.
Mortgage rates are currently in the high 6% range, and a drop back to the pandemic-era sub-3% levels is considered unrealistic by economists.
Bob Schwartz, a senior economist with Oxford Economics, explained that just a 1% drop in mortgage rates to lower than 6% should be enough of an incentive for at least some current homeowners to sell.
The percentage of mortgages outstanding with a rate higher than 6% has more than doubled since 2021, keeping many homeowners from selling their homes.
More than 50% of outstanding mortgages have rates in the 3% to 4% range, illustrating the reluctance of homeowners to trade up or downsize.
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