The Blubber

People who purchased homes and locked in 3% mortgage rates in 2020 and 2021 are now reluctant to sell, keeping inventory tight and prices high, per Redfin.

"Everyone is locked in 3% mortgage except millennials," Bank of America, $BAC, has said.

82.4% of homeowners in the US have a mortgage rate under 5%, per Redfin.

Indeed, as per Redfin, a significant 82.4% of homeowners currently maintain a mortgage rate below 5%, with 62% enjoying rates below 4%. Remarkably, a notable 23.5% of homeowners possess a mortgage rate below 3%, marking one of the highest proportions with such low rates on record.

Redfin posits that these statistics play a pivotal role in the scarcity of new home listings. Both the quantity of newly listed homes and the overall number of listings have plummeted to unprecedented levels for this time of the year.

These numerical trends intensify the competition among prospective American homebuyers, concurrently acting as a deterrent to a decline in home prices.

Considering the persistently high mortgage rates, which may escalate further, it's conceivable that an increasing number of current homeowners will refrain from selling and re-entering the market. This dearth of additional inventory raises concerns about the continuation of the bubble in US home prices.

Edward Seiler, Associate Vice President for Housing Economics at the Mortgage Bankers Association, emphasized in a recent interview with Insider that, for new buyers, the housing market has reached an unprecedented level of unaffordability.

Read more: https://unusualwhales.com/news/everyone-is-locked-in-3-mortgage-except-millennials-bank-of-america-bac-has-said