Rising Mtg rates are stopping mobility
People want and need different types of housing during their lifetimes. Coming of age individuals want to live on their own away from their parents. Developing families want more space. Elderly want less yard-work. Some people move to be closer to work. We all want the ability to change where we live when our lifestyles change.
Mtg rates are hurting this.
Example Scenario
Let's take an example:
A family happens to have a 4BR 2.5BA home they bought 10 years ago and it is worth $600k.
They bought it 5 years ago so they have a mtg of $400k.
They refinanced their 30-year mtg as recently as July 2021 at 2.75% for P&I of $1633/month.
They decide they need a smaller home in a different location for some reason.
That house is at a price of $500k and now they have a mtg of $300k with no change to taxes or insurance.
That $300k mtg at 4.5% today costs them $1520/month.
Essentially, to get a house that sells for $100k less, they are only saving $113/month. Who is going to make that choice?
This is having a real impact; people will stay where they are until they HAVE TO MOVE, as the period of low interest rates has spoiled us. This lack of mobility will last for a while until interest rates stabilize and people know that is where they will stay. This will stabilize the prices of homes so people will be comfortable making a change.
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