The real estate market, much like the wintery holidays, is frozen solid due to inactivity. Mortgage rates have remained elevated causing both homeowners and prospective home buyers to dip out of the selling and buying game.

Before the pandemic, existing-home sales was at 5 million seasonally adjusted annualized sales (SAAR), but the newest data shows sales have dropped below 4 million SAAR First American Data & Analytics said. This information is forecasting 2024 to have a modest improvement in home sales, but it will not reach normal averages.

As of October 2023, potential existing-home sales is 22.6% below the peak of market potential, which occurred in April 2006. By September, home sales reached a 12-year low.

Next year, the frozen trend will continue, but industry forecasts anticipate that 2024 will end with a 6.4% mortgage rate, which is a large improvement over the 8% high homebuyers faced in 2023. If this occurs, the market will gain some traction but not enough to make headlines.

“Lower mortgage rates in 2024 will likely not be low enough to end the sellers’ strike entirely, but for those homeowners who do choose to sell, improved affordability for potential buyers means there will be someone to buy it at the right price,” the Mreport said.

While homeowners stand firm with locked-in rates, they aren’t taking advantage of their higher home equity either. U.S. homeowners now have more than 23.9 trillion in home equity, which is 64% higher than it was 6 years ago. Previously, these homeowners turned to cash-out refinances to do home renovations, pay off debts, or invest in business ventures. However, the high interest rates are preventing them from doing so.

As lending options have become more strict, homeowners’ equity has increased by 241% over the past 10 years. At the same time, the outstanding loan balances for home equity loans and HELOCs have decreased by 48%.

“Americans are feeling financial stress in various ways right now: credit card debt is at all-time highs, savings rates have dipped, and inflation has dramatically increased the cost of living,” said Eddie Lim, Co-Founder and CEO of Point. “However, homeowners are sitting on significant wealth they could use to improve their situations but don’t have a great option to access the wealth. It’s like we’ve all lost the PIN to our debit card–we have the money but don’t know how to access it.”

These tighter lending standards have caused Americans to take a step back on even thinking about refinancing their homes. A homeowner locked into a low interest rate of 3% could increase their mortgage payment of $1,050 to $2,500 overnight with such a decision, and due to the poor economy, this isn’t an option for the average family strained by inflation.

Whether it’s a good or bad idea to refinance is actually a moot point as many Americans don’t even qualify for a HELOC. The denial rate for HELOCs is 46%, compared to 12% for a conventional mortgage. Lenders usually require a credit score of at least 680 (many want a score above 720), while 25% of Americans have a credit score under 650.

As home sales and home loans remain frozen, foreclosures experienced an uptick this fall. According to the Intercontinental Exchance, Inc., foreclosure starts rose to their highest level in 18 months – an increase of 33,000.

While foreclosure starts rose in October, serious delinquencies are  currently historically low.