Scott has an interesting post that may partly explain why there’s such a low inventory of homes on the market: Low mortgages rates.
Basically, it boils down to many homeowners not wanting to sell if it means losing their super-low mortgage rates. As one of Scott’s readers puts it: “No way will I give up my 3.25% mortgage, without some very compelling reasons.”
The phenomenon, called “lock-in,” is quite serious, according to a recent study by DePaul University’s Institute for Housing Studies.
So let’s get this straight: A monetary policy of low interest rates designed, in part, to spur housing and economic activity is actually causing slower housing and economic activity.
Makes sense to us!
File under: Damned if you do, damned if you don’t