Intermediate terms

Housing Inventory & Lock-In Effect: Key Terms

Explore key terms that might be helpful when understanding the 'lock-in effect' and its impact on housing inventory. This curated collection offers clear explanations of commonly referenced concepts shaping today's real estate market, providing a quick reference for investors.

Learning Path

Housing Demand

Housing demand refers to the total number of homes that potential buyers or renters are willing and able to purchase or lease at various price points within a specific market and time frame. It's a key indicator of market health.

Beginner3 min

Mortgage Rate

A mortgage rate is the interest percentage charged by a lender on a home loan, directly determining the cost of borrowing and influencing monthly payments and total repayment amount.

Beginner12-13 min

Housing Affordability Crisis

The Housing Affordability Crisis refers to a market condition where a significant portion of the population struggles to afford adequate housing due to high home prices, rising rents, and stagnant wages relative to housing costs. It impacts both homeowners and renters, creating barriers to entry for new buyers and financial strain for existing residents.

Intermediate5 min

Seller's Market

A real estate market condition where low inventory and high buyer demand give sellers a significant advantage, leading to higher prices and faster sales.

Intermediate11-12 min

Fixed-Rate Mortgage

A fixed-rate mortgage is a home loan with an interest rate that remains unchanged for the entire loan term, providing stable and predictable monthly payments.

Beginner13-14 min

Housing Supply

Housing supply refers to the total number of homes available for sale or rent in a specific market at a given time, indicating the availability of properties for buyers and renters.

Beginner2-3 min

Adjustable-Rate Mortgage

An Adjustable-Rate Mortgage (ARM) is a home loan where the interest rate can change periodically based on an index, leading to fluctuating monthly payments after an initial fixed-rate period.

Beginner14-15 min

Interest Rate

An interest rate is the percentage charged by a lender for the use of borrowed money, typically expressed as an annual percentage of the principal amount.

Beginner15-18 min

Mortgage Rate Lock-In Effect

The mortgage rate lock-in effect occurs when homeowners with low-interest rate mortgages are reluctant to sell their properties or refinance, due to significantly higher prevailing interest rates for new loans.

Intermediate5-6 min

Equity

Equity in real estate is the portion of a property's value that an owner truly owns, free and clear of any outstanding debts or liens. It is calculated as the property's current market value minus the total amount owed on any mortgages or loans.

Beginner12-13 min

Refinancing

Refinancing is the process of replacing an existing mortgage or loan with a new one, often to secure better terms, lower interest rates, or access built-up property equity.

Intermediate15-18 min

Borrowing Costs

Borrowing costs are the expenses incurred when taking out a loan or using credit, primarily consisting of interest payments and various fees charged by lenders.

Beginner2-3 min

Market Liquidity

Market liquidity in real estate refers to the ease with which a property can be converted into cash without significantly impacting its price. It's a critical factor for investors assessing the flexibility and risk of their real estate holdings.

Intermediate5-6 min

Home Price Appreciation

Home price appreciation refers to the increase in a property's market value over a period, driven by various economic, demographic, and local market factors, leading to capital gains for investors.

Intermediate5-6 min