In a piece for CNBC, staffer Diana Olick reports that home buyers aren’t bothered by higher rates, but sellers are. It’s a trend that’s further complicating the inventory shortages in markets across the country.
A recent National Association of Realtors survey shows that agents are hearing very few concerns from buyers about rising mortgage rates or the new tax laws, even fewer concerns than in December, when the tax laws were in final debate. But when it comes to sellers the response is different.
"The one concerning trend is the interest rate lock effect," said Lawrence Yun, chief economist at the NAR. Sellers are telling agents increasingly that they do not want to move because they will lose the record-low mortgage rate they have locked in.
Buyers are eager to get a mortgage quickly because rates continue to rise, but there aren’t many homes for sale.
"Mortgage rates are at their highest level in nearly four years, at a time when home prices are still climbing at double the pace of wage growth," added Yun. "Homes for sale are going under contract a week faster than a year ago, which is quite remarkable given weakening affordability conditions and extremely tight supply. To fully satisfy demand, most markets right now need a substantial increase in new listings."
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