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Rate drops, even marginal ones, are generally welcomed by home buyers sensitive to rates, yet buying activity has stayed persistently low. Although the inventory of homes for sale is growing and increasing choices for buyers, the pressure from high rates and high home prices is still squeezing affordability. "We know the reason [for low demand]: record-high home prices hitting affordability, and also mortgage rates [are] much higher compared to a couple of years ago," said Lawrence Yun, chief economist at the National Association of Realtors®. The "lock-in effect," in which many homeowners sitting on low-rate mortgages are choosing to stay put rather than sell, may be wearing off for households needing a change. "Some people need a different size home because they have additional child[ren] in the family, or some people want to change the school district, or jobs have changed, and they want to change based on their commute pattern," Yun said. "Even at a higher mortgage rate, life changes." He added that people are starting to normalize higher rates. Still, this doesn't mean supply is back to normal or pre-COVID levels. April's supply remains 34% below the same month in 2019. "We still have tight inventory despite the fact that we have this increase from one year ago,” Yun said. “It is just a testimony of how tight the market was in the last year and in the years prior."