'The bottom line is that homeowners across America do not have any incentive to move,' Apollo chief economist says.
Mortgage rates are inches away from 7% — but less than a tenth of U.S. homeowners have a home loan at that rate.
In fact, only 9% of all existing mortgages in the U.S. were taken out with a rate of above 6%, according to data from the Federal Housing Finance Agency, and analyzed by Torsten Slok, chief economist of Apollo Global Management. A typical new homeowner today will join the ranks of the small group that has a home loan with an interest rate of above 6%.
“The bottom line is that homeowners across America do not have any incentive to move and get a new mortgage,” Slok said.The supply of new homes has been severely constrained by this imbalance between current rates and lower rates held by the majority of homeowners. New listings — a measure of how many sellers were putting up their homes for sale — were down 27% in early July versus a year ago, according to data from Realtor.com NWSA .
Young homeowners delay selling Younger homeowners in particular feel more stuck, given that they have more mortgage debt left to pay off compared to their older counterparts, who have been paying it off for years.
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