In a promising turn of events for prospective homebuyers, the housing market is shaking off the constraints of high mortgage rates, as revealed by a recent survey conducted by Zillow. The real estate listing giant reported that 21% of homeowners are contemplating listing their homes within the next three years, potentially injecting a much-needed boost to the inventory-starved market.
Notably, the survey indicated a shift in seller sentiment regarding mortgage rates, with homeowners holding rates below 5% showing nearly equal readiness to sell as those with rates above 5%. This departure from the past year’s trend, where high mortgage rates dissuaded many from putting their properties on the market, is seen as a positive sign by Zillow’s Chief Economist Sylar Olsen.
“Rate lock appears to be wearing off for some homeowners, who show encouraging signs that they’re ready to come back to the market,” Olsen stated in Zillow’s December housing market report. The data suggests that lower mortgage rates, hovering around 6.66% for a 30-year fixed mortgage last week, are becoming less of a deterrent for potential sellers.
Additionally, Zillow’s data revealed a 2% year-over-year increase in new home listings in December, marking a positive trend in supply. The total supply of homes on the market is now only 14% lower than pre-pandemic levels, a significant improvement from the 35% dip experienced in April.
With mortgage rates on a decline and inventory showing signs of recovery, industry experts anticipate improved housing affordability in the coming year. This optimistic outlook follows a year of tight supply, which pushed home prices to record levels in 2023. Analysts from Redfin predict a gradual easing of both prices and mortgage rates throughout the year, offering prospective homebuyers a more favorable market.