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FT: FHFA White Paper Explains Mortgage “Rate Lock” Effect

Published on May 10, 2024

A recent Financial Times article highlights a prevalent dynamic in the U.S. mortgage market where borrowers have ‘locked-in’ lower interest rates on mortgages than are currently available within the market, making it unattractive to move. FT highlights a recent FHFA White Paper, that found that the ‘lock-in’ effect has led to a 57% reduction in home sales financed by fixed-rate mortgages in Q3 2024 and prevented 1.33 million home sales between Q2 2022 and Q4 2023. 

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