US Housing Market Paralyzed as Mortgage Rates Hit 7% and Sales Plunge

The US housing market has entered a state of paralysis as 30-year mortgage rates reached the 7% threshold, severely impacting affordability. New home sales experienced a sharp 18% decline in January, marking the most significant drop in 13 years. A supply-side freeze has emerged as millions of homeowners remain locked into COVID-era mortgage rates of 3% or lower, refusing to sell. This disconnect between current market rates and existing low-interest loans has effectively stalled transaction volumes across the country. The stagnation is weighing heavily on real estate ETFs such as XHB and ITB, as well as mortgage-backed securities like MBB. Analysts warn that this lack of economic mobility and reduced housing activity could have broader implications for the macro economy.

Sources:zerohedge.combenzinga.comdds.financerealpha.comyoutube.commontcoliving.comamerisave.comkiavi.comawealthofcommonsense.comnovoco.comhousing.inforealestatenews.com