Understanding Today’s Real Estate Market

In today’s evolving real estate landscape, mortgage rates are a major factor influencing both buyer behavior and homeowner decisions. As the chart illustrates, a staggering 82.8% of U.S. mortgages have interest rates under 6%. This statistic, sourced from Freddie Mac and the FHFA, highlights a critical dynamic at play in the current housing market.

The majority of homeowners are locked into historically low mortgage rates. In fact, over 55% of mortgages have rates below 4%, making the prospect of selling and buying a new home at today’s higher rates financially unattractive for many. This contributes to a phenomenon known as the “rate lock-in effect,” where homeowners choose to stay put rather than refinance or move and face significantly higher monthly payments.

Understanding this backdrop is essential for both buyers and sellers. For sellers, this may explain why competition remains relatively low despite economic shifts. For buyers, recognizing that many current homeowners are disincentivized to sell can help explain low inventory levels in many markets. Our area here at the Jersey Shore is no exception. While we have seen a bump in our inventory for the ‘spring market’, we continue to see low inventory, rising prices, and bidding wars.

As rates fluctuate and the economy continues to shift, staying informed is key to making smart real estate decisions. Interested in receiving our monthly newsletter? Just let us know: mailto:[email protected]