“Mortgage Lock-in Effect Keeping Some Sellers on Sidelines”

It’s July in Marin, with some of the best weather months in the state about to start. Temperatures have actually stayed moderate, despite the threat of climate change, which is really global warming for most of the world, right? But we rarely saw the 100+ days that were more common years ago, capping out mostly in the mid 90’s for our hottest weeks of the summer. That, along with zero humidity keeps it as temperate as you can get, making it near-perfect for any of the outdoor activities Marin has to offer. The fog is also less prevalent, making it overall a great time of year. But this is a real estate blog, not a subsidiary of the Weather Channel. In a nutshell, it may be that fireworks aren’t the only thing to light up the sky this month. Home sales continue, despite the “mortgage lock-in effect” plaguing the low inventory supply here and in most of the country. 

I read recently that close to 90% of all homeowners in the U.S. have an interest rate of 5% or lower. Nearly half of all homeowners have a rate of 3.5% or even lower. While many of these people want to sell, trading up, down, or leaving the area entirely, they are stuck, “locked-in” and unable to stomach a mortgage of 7% (and climbing, likely). I know plenty of people who want to sell, they just can’t, or won’t, to be more accurate. This leaves today’s buyer often with few choices for homes to buy in any given price range. It helps save a lot on gas or electric charging as there isn’t a lot to drive around and look at. But it doesn’t help the moving companies, possibly explaining why UHaul stock dropped 15% at the end of May. Fewer people are moving. 

Where do we go from here? Who knows. It’s certainly as uncertain as I’ve ever seen it. Buyers continue to buy though. If they need to move, they move. We’ll see if they do that into July as they’ve done in the last few months, often at record prices.  

That’s it for now. Until next time, enjoy July wherever you are and please stay safe. As always, thanks for reading.

Ted

415.377.5222

ted@gomarin.com

Filed under: Marin Real Estate Blog by Ted Strodder