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Mortgage rates are expected to rise this year, aggravating the already-vexing problem of not enough existing homes on the market, according to a panel of economists speaking last week at the International Builders Show in Orlando.
Among the experts there was no consensus on rates other than that they are poised to increase. But Frank Nothaft, the former chief economist at mortgage giant Freddie Mac who now wears the same hat at CoreLogic, pointed out that those homeowners with mortgages at lower than the prevailing rate are thinking twice about putting their homes up for sale. “Realtors call it the lock-in effect,” he said.
Rather than sell, Nothaft explained, current owners may opt to stay a little longer and perhaps choose to update their residences, even if mortgage rates are only slightly higher than the one they’re paying now.
“The very limited inventory of homes on the market will continue,” he later told an overflow crowd of builders and allied professionals d…
Article image credited to Photo by Blake Wheeler on Unsplash