U.S. mortgage rates are above 6%, further exacerbating the housing affordability crisis through the so-called "lock-in effect." Homeowners who previously locked in lower mortgage rates have little incentive to sell their existing homes, as buying a new home means incurring significantly higher financing costs.
This phenomenon, in turn, restricts the entry of existing homes into the market, keeping the supply of secondhand homes under pressure. Jay Barry, Global Head of Interest Rates Strategy at JPMorgan Chase, noted, "Looking ahead, we expect the yield on the 10-year U.S. Treasury note to reach 5.05% by the end of 2026, while the average rate on a 30-year fixed mortgage has already surged to nearly 7%."
