Buyers have a huge incentive to wait for lower rates, but sellers aren't just passive observers of the situation--they also have a huge incentive not to sell.

Buyers have a huge incentive to wait for lower rates, but sellers aren't just passive observers of the situation--they also have a huge incentive not to sell. The vast majority of home owners (i.e. would-be sellers) financed/refinanced their home at the recent historically low rates. For them, selling right now doesn't sense--after all, they'll have to buy another house, and given the high current rates, they would have to pay much more per-month for a similarly-priced house. The free-money music has stopped. Now everyone is cemented to their seats, waiting for the music to start again.