Taps Coogan – June 16th, 2023

As we’ve noted before, thanks to a decade of low interest rates and huge churn in the real-estate market at ultra-low rates immediately after Covid, the overwhelming majority of existing mortgages remain at fairly low APRs. Via Charlie Bilello:

Despite the average APR on a new mortgage being nearly 7%, so few mortgages have been written at those high rates that they still aren’t a meaningfully part of the market. The implication of this, as we’ve noted before, is that existing home owners are heavily incentivized not to sell their homes and take on a new mortgage. While 7% mortgage APRs are likely to pull down homes prices, the lack of sellers is likely to slow down and drag that processes out.