In this episode, we explore a powerful but often overlooked force keeping the real estate market locked tight — and why even new inventory won’t fix it.

📌 Key Takeaways:

• The real estate market is like a game of musical chairs — for someone to buy a home, someone else has to move out.
• Even if new homes come on the market, demand still outweighs supply.
• One semi-invisible but critical factor is holding the market in place: historically low interest rates.
• Homeowners with 2–3% mortgage rates are effectively “locked in” and have no incentive to sell or move.
• Moving from a 2% mortgage to 5% or higher creates a massive jump in monthly payments — even for a similarly priced house.
• Most homeowners would have to downgrade to maintain the same payment, which very few are willing to do.
• Going “up” in home size or price now means doubling monthly payments due to higher interest rates.
• Many homeowners will choose to invest in upgrading their current home instead of buying a new one.
• This mortgage “lock-in effect” dramatically reduces the number of homes available for resale.
• Even if homeowners rent out their current home and buy a new one, it does not increase overall housing inventory — it simply shifts ownership.
• Buyers coming from the rental market will bear the brunt of higher mortgage rates, but they aren’t impacting resale inventory.
• The housing shortage may worsen, as fewer homeowners list their homes due to this invisible financial disincentive.

🏡 Final Insight:
The true crisis in real estate isn’t just about home prices or new construction — it’s about a mortgage-rate trap that keeps homes off the market. Until interest rates drop or new solutions are found, don’t expect a flood of available homes anytime soon.