{"id":14058,"date":"2026-01-05T14:44:13","date_gmt":"2026-01-05T14:44:13","guid":{"rendered":"https:\/\/zacksim.com\/blog\/?p=14058"},"modified":"2026-01-05T14:44:14","modified_gmt":"2026-01-05T14:44:14","slug":"mortgage-lock-in-stifles-housing-private-credit-risk-for-401ks-growth-in-emerging-markets","status":"publish","type":"post","link":"https:\/\/zacksim.com\/blog\/mortgage-lock-in-stifles-housing-private-credit-risk-for-401ks-growth-in-emerging-markets\/","title":{"rendered":"Mortgage lock-in stifles housing, private credit risk for 401(k)s, growth in emerging markets"},"content":{"rendered":"\n<p>In today\u2019s <em>Steady Investor<\/em>, we break down what\u2019s driving the market\u2019s current strength, and what could test it next, including:<\/p>\n\n\n\n<ul class=\"wp-block-list\">\n<li class=\"has-black-color has-text-color has-link-color wp-elements-68aad12341372e022596ccfbf0beb58b\"><a>Mortgage lock-in constrains housing supply<\/a><\/li>\n\n\n\n<li>Private credit risks for 401(k)s<\/li>\n\n\n\n<li>Emerging Markets show resilient growth<\/li>\n<\/ul>\n\n\n\n<p class=\"has-black-color has-text-color has-link-color wp-elements-7fe4b79330f74665609e4f404529770d\"><a><strong>Mortgage Rates Have Eased, But the Housing Market is Yet to Respond <\/strong><\/a><strong>\u2013 <\/strong><a>Mortgage rates have fallen to their lowest levels in a year (chart below), but for many homeowners, that relief hasn\u2019t been enough to restart the housing market.<sup>1<\/sup><\/a><\/p>\n\n\n\n<figure class=\"wp-block-image size-full\"><img loading=\"lazy\" decoding=\"async\" width=\"624\" height=\"219\" src=\"https:\/\/zacksim.com\/blog\/wp-content\/uploads\/2026\/01\/image.png\" alt=\"\" class=\"wp-image-14059\" srcset=\"https:\/\/zacksim.com\/blog\/wp-content\/uploads\/2026\/01\/image.png 624w, https:\/\/zacksim.com\/blog\/wp-content\/uploads\/2026\/01\/image-300x105.png 300w\" sizes=\"auto, (max-width: 624px) 100vw, 624px\" \/><figcaption class=\"wp-element-caption\"><strong><em>Source: Federal Reserve Bank of St. Louis<sup>2<\/sup><\/em><\/strong><\/figcaption><\/figure>\n\n\n\n<p><strong><u><a href=\"https:\/\/go.zacksim.com\/arrow-market-strategy-report?source=zim&amp;medium=blog&amp;term=steadyinvestor_zim_2025_12_29&amp;content=market_strategy_report\" data-type=\"link\" data-id=\"https:\/\/go.zacksim.com\/arrow-market-strategy-report?source=zim&amp;medium=blog&amp;term=steadyinvestor_zim_2025_12_29&amp;content=market_strategy_report\">What Matters for Markets as 2025 Comes to a Close<\/a><\/u><\/strong><\/p>\n\n\n\n<p>Market conditions are shifting quickly as the year ends, with policy decisions, growth signals, and risk sentiment all in focus. While headlines move fast, investors need clarity on what actually matters beneath the surface.<\/p>\n\n\n\n<p>Our free <strong><em><u><a href=\"https:\/\/go.zacksim.com\/arrow-market-strategy-report?source=zim&amp;medium=blog&amp;term=steadyinvestor_zim_2025_12_29&amp;content=market_strategy_report\" data-type=\"link\" data-id=\"https:\/\/go.zacksim.com\/arrow-market-strategy-report?source=zim&amp;medium=blog&amp;term=steadyinvestor_zim_2025_12_29&amp;content=market_strategy_report\">December 2025 Zacks Market Strategy Report<sup>3<\/sup><\/a><\/u><\/em><\/strong> breaks down the key market and economic developments investors should be paying attention to right now. Read it today to catch up on the most important issues shaping the outlook, including:<\/p>\n\n\n\n<ul class=\"wp-block-list\">\n<li>All Eyes on Fed December Meeting, and What Lies Ahead<\/li>\n\n\n\n<li>The Sharp Selloff in Bitcoin<\/li>\n\n\n\n<li>Making Sense of the Market\u2019s Tech Worries<\/li>\n\n\n\n<li class=\"has-black-color has-text-color has-link-color wp-elements-b07f34d16f81b4f7b5d6c9a1b86f5d28\">Plus, more essential market and economic stories<\/li>\n<\/ul>\n\n\n\n<p>If you have $500,000 or more, fill out the form to receive your free report today!<\/p>\n\n\n\n<p><strong><u><a href=\"https:\/\/go.zacksim.com\/arrow-market-strategy-report?source=zim&amp;medium=blog&amp;term=steadyinvestor_zim_2025_12_29&amp;content=market_strategy_report\" data-type=\"link\" data-id=\"https:\/\/go.zacksim.com\/arrow-market-strategy-report?source=zim&amp;medium=blog&amp;term=steadyinvestor_zim_2025_12_29&amp;content=market_strategy_report\">Download our complimentary <em>December 2025 Market Strategy Report<\/em><sup>3<\/sup><\/a><\/u><\/strong><\/p>\n\n\n\n<p>Roughly 30 million U.S. households (or more than half of primary mortgage holders) have mortgage rates at or below 4%. Most locked in those rates during the refinancing wave of 2020 and 2021. Fast forward to today, the idea of giving up a sub-3% mortgage for a loan north of 6% remains a tough tradeoff. This so-called \u201clock-in effect\u201d continues to suppress housing supply. Many homeowners who might otherwise move are choosing to stay put, keeping inventories well below historical norms and limiting transaction activity across much of the country. Meanwhile, home prices are still near record highs in many markets, while recurring costs such as insurance and property taxes have risen. Even modestly lower mortgage rates haven\u2019t been enough to offset the jump in monthly payments buyers would face by moving. According to Realtor.com, a buyer who paid roughly $1,300 per month on a mortgage in recent years would need to spend more than $2,200 to purchase a median-priced home today. For now, lower mortgage rates may help at the margins. But until rates, prices, or incomes shift more decisively, the lock-in effect is likely to remain a defining feature of the housing market.<\/p>\n\n\n\n<p><strong>Private Equity is Getting Pitched to 401(k)s. Investors Should be Cautious \u2013<\/strong> The trend is accelerating: private credit is getting pushed into 401(k) plans, with managers arguing that the asset class can offer diversification and steady income. But the experience of individual investors already exposed to similar products has been less encouraging in 2025.Publicly traded private-credit vehicles known as business development companies, or BDCs, have come under pressure as market conditions shifted.BDCs typically lend to midsize companies with below-investment-grade credit ratings, using the interest income to pay relatively high dividends. They became a popular access point for individual investors as private credit grew, with assets in the space more than tripling since 2020 to roughly $450 billion, according to industry estimates.In 2025, however, performance lagged. An exchange-traded fund tracking BDCs has declined while the broader stock market has risen, reflecting a combination of falling interest rates, loan losses at a handful of high-profile funds, and growing investor unease around credit quality.The pullback illustrates an important feature of private credit: while returns can appear stable during favorable periods, the asset class can be sensitive to both interest-rate changes and credit events. Unlike public bonds, many private loans don\u2019t trade frequently, which can make exits difficult and price adjustments abrupt when conditions change.The broader debate now centers on suitability rather than viability. While institutional investors with long-time horizons and limited liquidity needs may be able to absorb private credit\u2019s complexities, the experience of retail-focused vehicles highlights the tradeoffs involved, especially for investors who may react to volatility or need flexibility.<sup>4<\/sup><\/p>\n\n\n\n<p><strong>How Emerging Markets Could be a Hidden Growth Story \u2013 <\/strong>Trade policy has dominated the macro conversation for much of 2025, and tariffs have naturally pulled attention toward exports, supply chains, and cross-border flows. But that has overshadowed an interesting development in many Emerging Markets, where internal demand and service-driven growth have held up better than many expected.In Latin America, for example, tariff-related uncertainty has been loud, yet recent GDP data suggest broad economic activity has not fallen apart. In Brazil, output was essentially flat in the most recent quarter, but services still managed to grow modestly, and consumer spending did not roll over. Across Asia, the same pattern appears in different form. India continues to post rapid year-over-year growth, and services have remained a major engine alongside still-solid consumer demand. Indonesia has also seen household consumption continue to rise at a healthy pace. The takeaway isn\u2019t that every Emerging Market is booming. It\u2019s that the sources of growth are more diversified than the headlines imply.<strong><sup>5<\/sup><\/strong><\/p>\n\n\n\n<p><strong>Markets Are Shifting\u2014Are You Positioned for What\u2019s Next? <\/strong>Year-end brings heightened uncertainty as policy decisions, growth signals, and risk sentiment evolve. Even modest changes could drive meaningful shifts in market pricing.<\/p>\n\n\n\n<p>Our free <strong><em><u><a href=\"https:\/\/go.zacksim.com\/arrow-market-strategy-report?source=zim&amp;medium=blog&amp;term=steadyinvestor_zim_2025_12_29&amp;content=market_strategy_report\" data-type=\"link\" data-id=\"https:\/\/go.zacksim.com\/arrow-market-strategy-report?source=zim&amp;medium=blog&amp;term=steadyinvestor_zim_2025_12_29&amp;content=market_strategy_report\">December 2025 Zacks Market Strategy Report<sup>6<\/sup><\/a><\/u><\/em><\/strong> breaks down what\u2019s developing beneath the surface, and how investors can stay proactive, not reactive. Grab your copy now and get up to speed on other critical market themes, including:<\/p>\n\n\n\n<ul class=\"wp-block-list\">\n<li>\u00a0All Eyes on Fed December Meeting, and What Lies Ahead<\/li>\n\n\n\n<li>The Sharp Selloff in Bitcoin<\/li>\n\n\n\n<li>Making Sense of the Market\u2019s Tech Worries<\/li>\n\n\n\n<li>Plus, more essential market and economic stories<\/li>\n<\/ul>\n\n\n\n<p>If you have $500,000 or more, fill out the form to receive your free report today!<\/p>\n\n\n\n<p><\/p>\n","protected":false},"excerpt":{"rendered":"<p>More than half of current mortgages have rates below 4%\u2014making new loans over 6% a tough sell, private credit can be risky for 401(k)s, emerging markets could offer hidden growth. <\/p>\n","protected":false},"author":3,"featured_media":13584,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"_acf_changed":false,"footnotes":""},"categories":[71,73],"tags":[],"class_list":["post-14058","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-private-client-group","category-steady-investors-week"],"acf":[],"_links":{"self":[{"href":"https:\/\/zacksim.com\/blog\/wp-json\/wp\/v2\/posts\/14058","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/zacksim.com\/blog\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/zacksim.com\/blog\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/zacksim.com\/blog\/wp-json\/wp\/v2\/users\/3"}],"replies":[{"embeddable":true,"href":"https:\/\/zacksim.com\/blog\/wp-json\/wp\/v2\/comments?post=14058"}],"version-history":[{"count":1,"href":"https:\/\/zacksim.com\/blog\/wp-json\/wp\/v2\/posts\/14058\/revisions"}],"predecessor-version":[{"id":14060,"href":"https:\/\/zacksim.com\/blog\/wp-json\/wp\/v2\/posts\/14058\/revisions\/14060"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/zacksim.com\/blog\/wp-json\/wp\/v2\/media\/13584"}],"wp:attachment":[{"href":"https:\/\/zacksim.com\/blog\/wp-json\/wp\/v2\/media?parent=14058"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/zacksim.com\/blog\/wp-json\/wp\/v2\/categories?post=14058"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/zacksim.com\/blog\/wp-json\/wp\/v2\/tags?post=14058"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}