Those looking to sell in the next year are happy with their home equity but don’t want to take on a higher mortgage rate in order to move
SANTA CLARA, Calif., April 17, 2023 /PRNewswire/ — The Best Time to Sell your home is upon us, but there is one major issue holding sellers back – high mortgage rates. According to a new survey from Realtor.com® and HarrisX, the vast majority (86%) of those planning to sell their home in the next 12 months are also planning to buy a new home. And because most of these sellers will be taking on a new mortgage, this creates a major affordability hurdle. In fact, 82% of these seller-buyers feel “locked in” by their currently low mortgage rate. As a result, more than half of seller-buyers (56%) who are planning to sell in the next 12 months said they are waiting for rates to come down, while 25% need to sell soon for personal reasons.
“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.”
Home equity at all-time highs
The good news for sellers is that they have a lot of equity in their current home. Eighty-five percent of potential sellers are happy with the amount of equity they have in their home. Specifically, 74% estimate that they have more than $100,000 in home equity and 20% estimate that number to be more than $300,000.
Sellers still have sky-high expectations
Despite higher mortgage rates, sellers still have high expectations for their home sale, in many cases even higher than potential sellers who were surveyed in Aug. 2022. Thirty-three percent of potential sellers said that they want to take advantage of the current market and think they can make a profit. Even in this shifting market:
- 43% expect to get their asking price (up from 27% in 2022)
- 37% expect to have an offer within a week (compared to 33% in 2022)
- 35% expect buyers to be willing to forgo contingencies like inspections and appraisals to make the deal (compared to 30% in 2022)
- 34% expect an all-cash offer (up from 22% in 2022)
- 31% expect to get more than their asking price (compared to 30% in 2022)
- 27% expect 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, 2023, among 2,286 adults in the U.S. by HarrisX. The sampling margin of error of this poll is +/- 2.1 percentage points and larger for subgroups. The results reflect a nationally representative sample of U.S. adults. Results were weighted for age by gender, region, race/ethnicity, and income where necessary to align them with their actual proportions in the population.
Realtor.com® is an open real estate marketplace built for everyone. Realtor.com® pioneered the world of digital real estate more than 25 years ago. Today, through its website and mobile apps, Realtor.com® is a trusted guide for consumers, empowering more people to find their way home by breaking down barriers, helping them make the right connections, and creating confidence through expert insights and guidance. For professionals, Realtor.com® is a trusted partner for business growth, offering consumer connections and branding solutions that help them succeed in today’s on-demand world. Realtor.com® is operated by News Corp [Nasdaq: NWS, NWSA] [ASX: NWS, NWSLV] subsidiary Move, Inc. For more information, visit Realtor.com®.
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Originally published at https://www.prnewswire.com/news-releases/realtorcom-survey-82-of-those-looking-to-buy-and-sell-a-home-feel-locked-in-by-low-mortgage-rate-301797342.html