Rate-Locked Homeowners
One of the biggest challenges facing the local housing market right now is the low supply of homes for sale. According to the Federal Housing Finance Agency (FHFA), the average interest rate for current homeowners with mortgages is less than 4%. However, the typical mortgage rate offered to buyers today is over 6%. As a result, many homeowners are opting to stay put instead of moving to another home with a higher borrowing cost. This is a situation known as being rate locked.
Fear of Not Finding Something To Buy
Another factor holding back potential sellers is the fear of not finding another home to buy if they move. Worrying about where they’ll go has left many on the sidelines as they wait for more homes to come to the market. That’s why, if you’re on the fence about selling, it’s important to consider all your options. That includes newly built homes, especially right now when builders are offering concessions like mortgage rate buydowns.
What Does This Mean for You?
These two issues are keeping the supply of homes for sale lower than pre-pandemic levels. But if you want to sell your house, today’s market is a sweet spot that can work to your advantage. Be sure to work with a local real estate professional to explore the options you have right now, which could include leveraging your current home equity.
According to ATTOM, 48% of mortgaged residential properties in the United States were considered equity-rich in the fourth quarter. This could make a major difference when you move. Work with a local real estate expert to learn how putting your equity to work can keep the cost of your next home down.
Bottom Line
Rate-locked homeowners and the fear of not finding something to buy are keeping housing inventory low across the country. But as mortgage rates start to come down this year and homeowners explore all their options, we should expect more homes to come to market
