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"I have no interest right now in selling," he said. He and his wife plan to remodel instead.
A shortage of homes for sale has plagued the housing market since late 2012. The number of available homes last year was the equivalent of just 4.9 months' worth of sales, according to the National Association of Realtors. That's far below the typical figure of 6 months. Inventory has recovered somewhat this year, partly because the spring buying season is underway, but it was still equal to just 5.6 months of supply in May.
Meanwhile, sales of existing homes have fallen 5 percent in the past year. Yet prices rose 8.8 percent nationwide during the same period, according to CoreLogic, partly because of the limited supply.
What economists call "rate lock-in" is one of several reasons so few houses are for sale. Another factor is that almost 40 percent of homeowners still don't have enough equity to enable them to sell. Some are "underwater," with a mortgage higher than the home's value. Others may have so little equity that they can't afford to pay off the sales costs and put a down payment on their next property.
"We are in a uniquely difficult period for matching buyers and sellers," says Stan Humphries, chief economist at real estate data provider Zillow.
Home prices are expected to keep rising in the coming months, though at a slower pace than the double-digit gains that occurred earlier this year. Higher prices should lower the number of underwater homes and enable more people to sell.
But as the number of underwater homes falls, several studies suggest the impact could be offset by higher mortgage rates, which would increase the number of homeowners facing interest rate "lock-in." Most economists expect mortgage rates to rise later this year as the Federal Reserve ends its bond-purchase program, which is intended to keep borrowing rates low.
"Mortgage rate lock-in is going to be a major challenge for the housing market going forward," Humphries said. "It is going to be a constant tug of war between buyers on one side ... and mortgage rate lock-in on the other side."
Humphries forecasts that rates will reach 5 percent by the first three months of next year. That would mean those buying or refinancing now, at the current rates of about 4.1 percent, might never want to sell either.
A 2011 study by the Federal Reserve Bank of New York concluded that for every $1,000 increase in a homeowner's annual mortgage payment, the likelihood that homeowner would sell fell as much as 16 percent.
Paul Bernard, a recruiter in New York City, says the issue has begun to interfere with some of his clients' willingness to move for a new job. In one recent case, an employee at a large technology firm decided to postpone a job-related move to San Francisco partly because it would have forced him to take out a mortgage at a half-percentage point higher than his current one.
"The job market in some cases is less mobile than it used to be," he said.
Low rates have combined with rising rents nationwide to make renting out a home, rather than selling, more attractive. Renters are now paying 19 percent more of their income to rent, compared with historical averages, according to real estate data provider Zillow.
Santiago Garcia, 30, and his wife both work from home and recently felt their 2-bedroom condominium was getting cramped. The couple was also thinking of starting a family. So in February they bought a new home in Oxford, Massachusetts, about 45 minutes from Boston.
But the mortgage rate on their condo is just 2.95 percent, so they decided to keep it and rent it out. The mortgage is so low because its rate is adjustable after 10 years.
Their monthly mortgage payment is only $540. But they are renting it out for $1,200 a month.
"The cash flow was so much, it was an easy decision," Garcia said.