Downside of Low
Mortgage Rates? Reluctance to Sell
Many homeowners are declining to list for sale because it would mean forfeiting an ultra-low mortgage rate and taking out a new loan bearing interest up to a percentage point higher. Many Americans refinanced between late 2011 and mid-2013, when rates held below 4 percent. More than a third of homes with a mortgage now bear interest below that threshold, estimates real estate data provider CoreLogic. While mortgage interest remains low today at 4.2 percent on average, it is still three-quarters of a point higher than it was 18 months ago. As many as 3.6 million homeowners are unlikely to sell this year because they would have to give up a lower rate, estimates CoreLogic chief economist Mark Fleming. As a result, the supply of available homes is limited, which has contributed to higher prices. The number of available homes last year was the equivalent of just 4.9 months' worth of sales, according to the National Association of Realtors, far below the typical figure of six months.
From "Downside of Low Mortgage Rates? Reluctance to Sell"
Associated Press (07/15/14)
Many homeowners are declining to list for sale because it would mean forfeiting an ultra-low mortgage rate and taking out a new loan bearing interest up to a percentage point higher. Many Americans refinanced between late 2011 and mid-2013, when rates held below 4 percent. More than a third of homes with a mortgage now bear interest below that threshold, estimates real estate data provider CoreLogic. While mortgage interest remains low today at 4.2 percent on average, it is still three-quarters of a point higher than it was 18 months ago. As many as 3.6 million homeowners are unlikely to sell this year because they would have to give up a lower rate, estimates CoreLogic chief economist Mark Fleming. As a result, the supply of available homes is limited, which has contributed to higher prices. The number of available homes last year was the equivalent of just 4.9 months' worth of sales, according to the National Association of Realtors, far below the typical figure of six months.
From "Downside of Low Mortgage Rates? Reluctance to Sell"
Associated Press (07/15/14)
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