📈 Mortgage rate lock-in freezes housing turnover

“And then for the new one, you're going to lose your 3% mortgage and have to get a new one at 7%. So you're not going to buy anything like the house you currently have. So it freezes the market. It freezes mobility. I think over the last few years during COVID, you saw tremendous movement between states. I think that's going to slow down a lot now because people just can't afford to trade houses.”

“if it's going to cost you 8% to buy a new house and it used to be 3% a couple of years ago... you can't afford to sell your current house and buy a new one because your current house is financed at 3%... So we're already seeing a huge reduction in the number of transactions in residential real estate... I think that as this washes through the system, you could see a big correction in the values of residential real estate, which is most people's main asset.”

“my only thought around housing was that very much just supporting what Sacks just said. We're in an incredibly untenable situation, mostly because as rates go up, mortgage applications go down and so what you're seeing is just the number of people trying to transact is very small and so the inventory is very small”

“Mortgages, the rate now is approaching 8%. So no one can afford to sell their house, which has a 3% mortgage, and then buy a new one at 8%. So real estate transactions have cratered.”

“if you sell your house, you lose your 3% mortgage. Now you have to get a new one at 8%. So everyone stopped trying to sell their house. The number of real estate transactions has gone down a lot”

“a lot of people will not list their home or sell it because that 6% might put them underwater.”

“That makes it harder to buy a house. Mortgage payments are higher... if there's fewer home sale transactions, that means the price of housing could come down. So there could be a correction in that market”