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ARE MORE HOMEOWNERS SELLING AS MORTGAGE RATES COME DOWN?

Don Pelletier

With over 36 years as a professional Realtor, and the 2,200 San Diego home sellers and buyers Don has represented, he has a long-standing tradition an...

With over 36 years as a professional Realtor, and the 2,200 San Diego home sellers and buyers Don has represented, he has a long-standing tradition an...

Mar 13 4 minutes read

If youā€™re looking to buy a home, the recent downward trend in mortgage rates is good news because it helps with affordability. But thereā€™s another way this benefits you- it may inspire more homeowners to put their houses up for sale. 

Over the past year, one factor thatā€™s really limited the options for your move is how few homes were on the market. Thatā€™s because many homeowners chose to delay their plans to sell once mortgage rates went up. An article from Freddie Mac explains: ā€œThe lack of housing supply was partly driven by the rate lock-in effect. With higher rates, the incentive to existing homeowners to list their property and move to a new house has greatly diminished, leaving them rate locked.ā€ These homeowners decided to stay put and keep their current lower mortgage rate, rather than move and take on a higher one on their next home. According to the latest data from Realtor.com, there were more homeowners putting their houses up for sale, known in the industry as new listings. Hereā€™s why this is so significant. Typically, activity in the housing market cools down in the later months of the year as some sellers choose to delay their moves until January rolls around. This is the first time since 2020 that weā€™ve seen an uptick in new listings this time of year. This could be a signal that the rate lock-in effect is easing a bit in response to lower rates. While there isnā€™t going to suddenly be an influx of options for your home search, it does mean more sellers may be deciding to list. According to a recent article from the Joint Center for Housing Studies: ā€œA reduction in interest rates could alleviate the lock-in effect and help lift homeowner mobility. Indeed, interest rates have recently declined, falling by a full percentage point from October to November 2023. Further decreases would reduce the barrier to moving and give homeowners looking to sell a newfound sense of urgency.ā€ And that means you may see more homes come onto the market to give you more fresh options to choose from. As mortgage rates come down, more sellers may re-enter the market-that gives you an opportunity to find the home youā€™re looking for.

My team and I would be happy to help walk you through all your options and to help you find the best solution that will work for you and your family should you find yourself in this position. Feel free to reach us at 858-336-1114 or [email protected].



 


Whether you want to sell your existing home, buy your first home, upsize, downsize, purchase a vacation home, or just talk about options, a real estate professional is your best source for information based on current trends in our area. If you're interested in learning more about the 2023 real estate forecast, don't hesitate to reach out - we're happy to help!

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