The current movements in the market are setting homebuyers up for a prime spring homebuying season, but many are still reluctant to make a move, new reports show.
Mortgage rates are down significantly year over year on 30-year fixed-rate loans, and last week, fell below 6 percent for the first time since 2022. They rose back up to 6 percent as of Thursday, according to Freddie Mac, which is still a big improvement from the 6.63 percent rate seen this time last year.
Meanwhile, active inventory is also up 6.8 percent year over year, according to Realtor.com’s Weekly Housing Trends report, providing buyers with more options so far this spring season.
The median listing price fell 2.3 percent year over year, marking the 19th consecutive week of either flat or negative price growth on an annual basis, Realtor.com noted. Homes spent a median of 68 days on market — five more days on market than they did during the same period last year — providing buyers with a bit more breathing room when it comes to shopping around.
“Everything points to a market that is ripe for buyers to make a move,” Realtor.com Senior Economist Anthony Smith said in the weekly report.
Anthony Smith | Realtor.com
“The price correction we have been anticipating since the pace of sales slowed down and inventory started to recover has finally arrived,” he added.
Despite those positive factors in homebuyers’ favor, however, many would-be buyers continue to hesitate to enter the market.
Many potential sellers also still feel locked in to the 2- to 3-percent mortgage rates of the pandemic era, which they feel are too good to give up in the current environment. That seller hesitancy is reflected in the number of new listings, which fell by 7.6 percent year over year, according to Realtor.com’s report.
Some sellers who have taken the step of listing their property have also become tired of waiting for buyers to come around and are unwilling to offer price cuts, causing them to take their home off the market for now. Still, other sellers who delisted in previous months are now finally coming around, according to data from Redfin, which shows that January saw a record number of relistings of properties.
If rates can make even a bit more incremental movement downwards, it should be enough to jumpstart the market this spring, Smith added.
“If mortgage rates continue to fall, [sellers will] have more flexibility to make a move and a more eager pool of buyers,” he said.
