Homeowners planning to sell their properties have good news and bad news for the housing market, according to a new survey from Realtor.com and HarrisX.
The good news is the overwhelming majority of those planning to sell their homes in the coming 12 months (86%) are also planning to buy a new home. But the bad news is most of these sellers will be taking on a new mortgage, but rates are considerably higher now than in the time they bought their homes – thus, 82% of these seller-buyers felt “locked in” by their currently low mortgage rate more than half of seller-buyers (56%) are waiting for rates to come down.
“One positive aspect that came out of the pandemic was historically low mortgage rates – and many people took advantage of this opportunity to buy their first home, upgrade to a more expensive home or refinance the home they were in,” said Realtor.com Chief Economist Danielle Hale. “Unfortunately, this comes with a bit of a catch-22, as homeowners who locked in a 30-year fixed rate in the 2-3% range don’t necessarily want to give that up in exchange for a rate in the 6-7% range.”
And perhaps the homeowners may not be in a hurry to vacate their premises. The survey found 85% of potential sellers were happy with the amount of equity they have in their home –74% estimated they have more than $100,000 in home equity and 20% estimated having more than $300,000.
As for those serious about selling, 43% expected to get their asking price (up from 27% in 2022), while 37% expected to have an offer within a week (compared to 33% in 2022) and 35% said buyers will be willing to forgo contingencies like inspections and appraisals to make the deal (compared to 30% in 2022). However, only 27% expected a bidding war to take place (compared to 32% in 2022).
“Given the changing housing market, it’s important for buyers and sellers alike to have realistic expectations heading into a home sale,” said Hannah Jones, Realtor.com economic data analyst. “By understanding the local market, sellers can make sure that they’re pricing their home well to help ensure a quick sale and avoid a home that lingers on the market.”
The survey was conducted online from Feb. 3-10 among 2,286 adults in the U.S. Realtor.com is operated by Move Inc., a subsidiary of News Corp (NASDAQ:NWSA).
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Homeowners who want to sell, but like their 2-3% intrest rate and don’t want to deal with 6-7% interest on their replacement, here is the solution: Seller gets a good deal (low offer accepted) on a replacement home, and a loan with a lower-than-average interest rate and down payment and closing costs assistance.
This is that if this is their new dream home they are buying with close to 100k equity, if their pocketbook can stand it use that for purchase power to include buy your rate down.