Fortune once called the historically low mortgage rates of the pandemic era a blessing and a curse. It’s true—there’s nothing better than a below-market rate, especially when there’s such a substantial difference, but it keeps you locked in, too; it’s hard to give up a, let’s say, 3% mortgage rate for a 7% one, unless you have no other choice.
It’s a phenomenon called the lock-in effect, and all year it has shown subtle signs of easing. Last year, existing home sales fell to their lowest point in almost three decades because nobody was selling or buying homes. But it seems sellers are finally ready; the only thing is, buyers aren’t matching their energy. “Home sellers are returning to the market but finding buyers hesitating,” Zillow’s chief economist Skylar Olsen wrote in a monthly housing report published yesterday.
