September 2023 · Guide · 4 min read · by Kinan Sawar, MD — REALTOR® at Shorewest, REALTORS®
The single most important force in housing right now isn’t demand or prices — it’s the cheap mortgages people refuse to give up.
To understand why a market with collapsing sales isn’t seeing collapsing prices, you have to understand the lock-in effect.
A large majority of American homeowners hold mortgages at rates far below today’s. Selling and rebuying means swapping a 3% loan for a 7% one — a payment increase so steep that most owners simply won’t move unless forced.
The result is a supply drought. Existing homes never reach the market, inventory sits near record lows, and the few buyers who are active compete over scraps. Low demand meets even lower supply — and prices stay sticky.
Lock-in is why the “2008 again” crash calls keep missing. A crash needs forced sellers; lock-in produces the opposite — owners who can comfortably wait. The market freezes instead of falling.
It also means the cure is slow: only lower rates or the steady drip of life events (moves, growth, retirements) gradually unlocks the supply.
Kinan Sawar, MD — REALTOR® at Shorewest, REALTORS®, serving Milwaukee and Southeast Wisconsin (Milwaukee, Waukesha, Ozaukee, Washington, Racine, Kenosha, and Walworth counties). Email: [email protected] · Phone: (618) 713-2964.
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Home values and rents are Zillow ZHVI/ZORI estimates for the named area, as of 2026-07-03; incomes and population are U.S. Census (SAIPE, Population Estimates); migration is IRS Statistics of Income. Area-level statistical estimates for information only — not an appraisal, and not financial, legal, or tax advice.