'Lock-in effect' from rising rates to constrain housing inventory, keep prices high for years
• The "lock-in" effect means current homeowners don't want to move due to higher mortgage rates • This reduces inventory and keeps buyers and sellers out of the market • Capital Economics expects home prices to keep rising, forecasting a 5% increase this year • They see mortgage rates staying above pre-pandemic levels, perhaps falling to 6% by end of 2024 • The lack of homes for sale will constrain housing market activity for years due to "lock-in" effect