The housing market’s largest problem is not going away anytime quickly.Economists at Financial institution of America warned that the housing market will stay “caught within the mud, and unlikely to develop into unstuck” till 2026 as the availability of houses for gross sales stays close to document lows.The so-called “lock-in” impact for owners who secured ultra-cheap mortgages when charges had been low throughout the pandemic has brought about homeowners to remain put.The funding financial institution believes the impacts of this might final 6 to eight years, conserving a lid housing exercise down and, in flip, residential funding that feeds into the GDP calculation.The “lock-in” impact might final 6 to eight years, decreasing housing exercise within the course of (Supply: Financial institution of America)Excessive rates of interest have majorly impacted homeownership.Mortgage charges stay hovering round 7% regardless of the latest pullback in borrowing prices, conserving provide low and pushing costs increased for houses that do commerce palms.Dwelling costs hit a brand new document in April, although annual progress slowed from the earlier month, based on the newest knowledge obtainable from Case-Shiller. Financial institution of America expects house costs to develop by about 4.5% this yr, 5.0% subsequent yr, and 0.5% in 2026.”Dwelling costs have already overshot their long-run elementary worth based mostly on disposable revenue,” Michael Gapen, an economist at Financial institution of America, wrote in a word to purchasers Friday.”Second, our outlook for the economic system requires continued normalization as the results of the pandemic transfer additional into the rearview mirror. The structural shift in housing demand that lifted house costs ought to fade over time. That mentioned, we predict it unlikely that house costs fall a lot.”