You had housing questions. An economist answered them.

Existing home sales in the US are near record lows, and mortgage rates recently hit 6.58%—the highest in nearly a year. Redfin chief economist Daryl Fairweather says the current market is "so different than anything we've seen historically." Normally, when rates rise, buyers back off and sellers drop prices. But this time, sellers aren't budging. They have what economists call "high reservation prices"—they'd rather delist than cut, and many aren't listing at all. The core problem: homeowners who locked in pandemic-era mortgages below 3% would face $1,000 more per month to buy the same house at today's rates. So the market is stuck.

Why rates are climbing and sellers aren't moving

Mortgage rates track the broader economy. Fairweather explains that a fast-growing economy combined with inflation the Fed finds uncomfortable is pushing rates upward. This creates what's been called the "mortgage lock-in effect." Buyers can't afford to buy; sellers can't afford to sell. The result is stagnation—a market where transactions grind to a near halt because the financial math makes moving prohibitive for homeowners.