Ep. 84 - What is the Lock-In Effect and How Will it Bring a Real Estate Boom?
The Lock-In Effect is sweeping across the nation, and it’s priming the real estate market! The 'Lock-In effect' is when homeowners are locked into a lower interest rate than currently available. With over 92% of all mortgages in America having a 6% or below interest rate and 82.4% being 5 or below, it is estimated that when a 5% mortgage comes online, it will be the new 3%. In this episode, we’ll dive into what this means for homeowners locked into a 4% or lower. Find out how to make a move to take advantage of this change. We’ll also explore the current state of the real estate market in America, discussing how demand has caused inventory levels to deplete across major metropolitans and other circumstances affecting the market.
Jump right in, and let’s figure out how the lock-in effect and other influencers will bring about the next real estate boom.
[00:01 - 03:53] Exploring the Lock-In Effect: how the 4% mortgage rate could lead to a ‘musical chairs’ scenario in homeownership
[03:54 - 07:05] 70% of people say mortgage rates are impacting their home-buying decisions
[7:06 - 10:44] Anticipating a real estate boom in 2024-2025 as builders get ready to meet demand
[10:45 - 14:14] A perfect storm for a real estate boom
Quotes:
"You're going to have people inside that 4% plus the people that are currently at 6 and even 5 that are in that lock-in effect that want to make a move. They're going to make the move. And what you'll see is almost like a musical chair aspect of homeownership." - Quinton Harris
"If history repeats itself from 2001, which we fully anticipate it will, we will see that 4% handle somewhere in 2025." - Quinton Harris
"Good times are ahead as you get through this, and it all takes is a little bit of rate drop." - Quinton Harris
Resources Mentioned:
- Yahoo Finance: 90% of homeowners locked into their mortgage
- Business Wite: A Factor Prompting People to Stay Put
- Inman: 92% of Homeowners Have a Rate Below 6%
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