[sfjailbird]

> sellers don't want to sell because they all locked in killer rates on their current homes

What happens is that house prices drop way below what they paid, and ends up equalizing their monthly payments with what someone who buys at the higher-rate-but-lower-price is paying. Except these people are locked into their current arrangement, since they cannot sell at a price that would cover the debt.

Some can ride this out over a number of years, some will end up taking a big hit because, for one reason or another (divorce, child birth, etc.) they have to sell and move. If you're old enough you will have seen this play out before.