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mortgage rates

A large share of existing owners hold mortgages fixed at rates far below what is available today. Moving means giving up that rate and financing a new purchase at current cost, which for many households means a higher monthly payment for the same amount of house. The rational response is to stay put. That decision, repeated across millions of households, removes both a seller and a buyer from the market simultaneously — which is why low transaction volume has not produced the price falls a simple supply-and-demand reading would predict.

  • A sustained fall in mortgage rates large enough to narrow the gap between existing and new financing — the single most powerful unlock, and the one least under any policymaker's direct control.
  • Life events that override financial logic: births, divorces, job relocations and retirements, which accumulate steadily and eventually force movement regardless of rates.
  • A meaningful increase in new construction, which adds supply without requiring an existing owner to sell.
  • A labour market deterioration severe enough to force distressed selling — the scenario crash forecasts implicitly assume, and the one current employment data does not support.

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