The housing world is in limbo. Last year, existing home sales plummeted to an almost three-decade low because nobody was selling or buying homes. It was a product of the lock-in effect and diminishing demand; the former because mortgage rates soared from the pandemic era's historic lows, and the latter because home prices skyrocketed along with borrowing costs.
There was an expectation that this year would be better, and in some ways it has been. But the housing market is still stuck, and “if mortgage rates stay above 6.5% this year—as we expect—then the chances of an imminent recovery are slim,” Capital Economics’ Thomas Ryan wrote earlier this week, referring specifically to mortgage applications.
