The Two Big Issues the Housing Market’s Facing Right Now
The Two Big Issues the Housing Market’s Facing Right Now The biggest challenge the housing market’s facing is how few homes there are for sale. Mark Fleming, Chief Economist at First American, explains the root causes of today’s low supply: “Two dynamics are keeping existing-home inventory historically low – rate-locked existing homeowners and the fear of not finding something to buy .” Let’s break down these two big issues in today’s housing market. Rate-Locked Homeowners According to the Federal Housing Finance Agency (FHFA), the average interest rate for current homeowners with mortgages is less than 4% ( see graph below ): But today, the typical mortgage rate offered to buyers is over 6% . As a result, many homeowners are opting to stay put instead of moving to another home with a higher borrowing cost. This is a situation known as being rate locked . When so many homeowners are rate locked and reluctan...