Sustained increases could lead to ‘rate lock,’ leaving some homeowners reluctant to trade up or down
By Laura Kusisto | The Wall Street Journal
Rising interest rates pose a dilemma for people who love their mortgage more than they hate their house.
A sustained period of rising rates could freeze homeowners with rock-bottom mortgages who otherwise might want to trade up for bigger or better properties.
Such situations, which economists call “rate lock,” could weigh on housing demand in 2017, economists said.
A seven-year run of historically low mortgage rates has encouraged home buying, helping increase prices sharply after the housing crash. The S&P CoreLogic Case-Shiller U.S. National Home Price Index reached a record in September.