Nearly four in five home sellers who plan to buy a new home are still feeling locked into their current property because of a lower interest rate, according to a recent survey from Realtor.com.
More specifically, 79% of prospective sellers indicated that they’re feeling the lock-in effect — not an encouraging figure at face value, but it’s down from 82% in 2023. And nearly four in five home sellers who recently sold their properties feel that they would have been able to take advantage of a hotter housing market.
Homeowners seem to be adjusting slowly but steadily to the new status quo, and it’s impacting the timing of their selling decisions. Of those who feel locked into their rate, 50% said they plan to wait until rates drop to sell, down from 56% last year. And 29% said they need to sell soon for personal reasons, up from 25% in 2023.
Even among those looking to sell in 2024, the prospect of transitioning from a lower interest rate to a higher one is making an impact. Seventy-three percent of homeowners planning to sell this year are planning to buy another home at the same time, down from 85% one year prior. Of the 27% who aren’t planning on buying a new home, 31% plan to rent, 33% already own another place to live and 26% are planning to move in with family or friends.
Sixty-four percent of would-be sellers also planning to buy expect that their new mortgage rate will be the same as or higher than their current rate. And 81% of sellers who think their new rate will be higher indicated that they are concerned that the increased rate will affect how much home they can afford.
“Plenty of homeowners have been eagerly waiting for mortgage rates to come down so that they can sell their current home and more affordably upgrade to a new one,” said Danielle Hale, chief economist at Realtor.com. “With mortgage rates expected to ease slowly throughout the year, some potential sellers are planning to get off the sidelines in 2024 and make a move, with the majority expecting to buy a new home at the same time that they sell their current one.”
Whatever the case, the pool of potential home sellers currently on the sidelines has been considering a move for a while. Homeowners have been thinking about selling their homes for an average of 2 years, according to Realtor.com’s survey. Eighty-five percent have been pondering a sale for between 1 to 3 years.
And those would-be sellers are tempering their expectations with regard to the sales process. Just 12% expect a bidding war to take place, down starkly from 27% in 2023. Just 15% anticipate getting more than their asking price, a big drop from 31% last year.
