The average 30-year mortgage rate is about 6.5%, causing a lock-in effect as nearly 60% of homeowners have rates at least 2 points lower, reducing seller activity. High rates and low wage growth suppress demand, leading to modest home price gains of around 2.3% in 2027. Existing home sales are forecasted to remain low, with inventory shortages preventing significant price drops. Rates are expected to stay elevated due to geopolitical tensions and potential Federal Reserve hikes.
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