A lot of would-be sellers aren’t selling their homes, and it’s because of the lock-in effect.
Throughout the pandemic and several years before, mortgage rates were really low. But the Federal Reserve raised interest rates to tame inflation, sending mortgage rates up along with them. So everyone who locked in a low mortgage rate before they soared are sitting on a gold mine. Their fixed debt is lower than what anyone could get in our current economic environment. Who wants to give that up?
