The housing market is thawing as more ‘mortgage lock’ homes come up for sale, says JPMorgan

Fitch Ratings found that homes in 91% of U.S. metro areas were overvalued in the third quarter.Richard Newstead/Getty Images

  • It appears that the housing market is gradually approaching a recovery.

  • A growing number of mortgage-backed homes are going up for sale, according to JPMorgan.

  • Sales of existing homes have increased by almost 10% in February.

The housing market looks similar starts to thawthanks to a growing number of mortgage lenders choosing to put their homes on the market, according to JPMorgan Asset Management.

The bench pointed out the “mortgage lock-ineffect, a phenomenon in which existing homeowners are reluctant to sell their properties because they want to hold on to the lower rates at which they financed their homes years ago. That reluctance slowed housing activity through most of 2023, with home sales fell by 18.3% last yearRedfin said.

But home sales have risen in recent months – a sign that the lock-in effect could loosen its grip on potential sellers, the bank said. Sales of existing homes increased by 9.5% in February, while existing housing inventory rose 5.9% from the previous month, according to data from the National Association of Realtors.

Homeowners may now be more willing to dive into the housing market, as many are realizing Mortgage interest rates won’t disappear anytime soon, say real estate economists. That adds much-needed inventory to the market, which is also being supplemented by new housing supply in the works: About 1.6 million homes are currently being built, JPMorgan estimates. In the meantime, the number of completed homes rose to 1.7 million in February 15.6% higher than last year,…

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