Insight
The 'Lock-in Effect' arises when existing homeowners are reluctant to sell their homes because they have lower mortgage rates than current market rates.
The “Lock-in Effect” and Mortgage Rates: Update on Unwinding a Phenomenon that Wrecked the Housing Market
Summary
This article discusses the 'Lock-in Effect' caused by rising mortgage rates and its impact on the housing market. It explains how this effect has made it difficult for homeowners to sell, which in turn has caused disruptions in housing supply and market dynamics. Understanding this phenomenon is crucial for STR hosts as it affects property availability and potentially influences rental demand in the long term.
Key takeaway