Seven per cent adds about $283 a month to a 30-year loan on the median US home

The number that governs this market is the step-up a seller has to accept in order to become a buyer. Apollo Global Management's research puts only a quarter of outstanding US mortgages above 6 per cent ^[13], and Mortgage News Daily had the 30-year fixed above 7 per cent on Thursday ^[6]. For the other three quarters of borrowers ^[15], moving house means repricing the debt by at least a full point. On a 30-year amortising loan for the whole of August's $429,100 median, that is about $2,856 a month at 7 per cent against $2,573 at 6. The difference is near $283 a month, or $3,400 a year ^[14].

Some 1.62 million listings against a 3.98 million annual selling pace works out to about 4.9 months of supply ^[10]. "The ample supply of homes for sale on the market is giving homebuyers better opportunities to negotiate," Yun said ^[9].

Price and volume are telling different stories. The median existing home sold for $429,100 in August, up 1.6 per cent on the year ^[3], while Apollo's research has 56 per cent of US households able to afford only a home under $300,000 ^[4]. That puts the median 43 per cent above the ceiling most households face ^[12], so the clearing price is being set inside the minority who can fund it.

One caution on the arithmetic in NAR's release. The 1.6 per cent figure appears twice: once as the year-over-year median price gain ^[3], and once in Yun's line that "Home prices are rising, and existing home sales are actually up 1.6% year-to-date through the first eight months of the year" ^[8].

The Daily Upside traces the rate move through two channels. One is the resumption of US and Iranian strikes in the Persian Gulf, lifting oil and with it priced inflation and long Treasury yields ^[18]. The other is $40 trillion of federal debt, pushing yields the same way ^[17]. Brent closed above $107 on Thursday, up 22.5 per cent in a month ^[11], which puts it near $87 four weeks earlier ^[16].

On this evidence the constraint is the coupon on debt already outstanding. If the 30-year fixed drops back under 7 per cent and the listings Apollo says are sitting below 6 per cent do not appear, then lock-in was the wrong explanation, and the problem is the $429,100 median against Apollo's $300,000 ceiling. The other path is faster: rates fall, buyers move before sellers do, 4.9 months of supply tightens and the price gain runs past 1.6 per cent. If oil holds where it closed Thursday, 3.98 million is the annual pace to budget against ^[2].