While mortgage rates and median listing prices are down, available inventory is up year over year, hesitant buyers may need to be more aggressive this spring.
Current market trends have homebuyers gearing up for the spring home buying season, but new reports reveal that many are still reluctant to make the move.
Mortgage rates for 30-year fixed-rate loans have fallen significantly year over year, dropping below 6% last week for the first time since 2022. That’s up to 6% as of Thursday, according to Freddie Mac, which is still a significant improvement from the 6.63% rate this time last year.
Meanwhile, active inventory is also up 6.8% year-over-year, according to Realtor.com’s Weekly Housing Trends Report, giving buyers even more options so far this spring season.
The median listing price fell 2.3% year-over-year, marking the 19th consecutive week of flat or negative price growth on an annual basis, according to Realtor.com. Homes were on the market for a median of 68 days, five days more than the same time last year, giving buyers a little more leeway when shopping.
“Everything points to a buyer-friendly market,” Anthony Smith, senior economist at Realtor.com, said in a weekly report.
Anthony Smith | Realtor.com
“The price correction we have been anticipating since sales slowed and inventories began to recover has finally arrived,” he added.
However, despite these positive factors in favor of home buyers, many prospective buyers are still hesitant to enter the market.
Additionally, many potential sellers still feel locked into pandemic-era 2-3% mortgage rates and think it would be a waste to abandon them in the current environment. This hesitation among sellers is reflected in the number of new listings, which are down 7.6% from a year ago, according to a report from Realtor.com.
Some sellers who have taken the step of listing their property are tired of waiting for a buyer, are unwilling to lower the price, and take their home off the market for the time being. Still, other sellers who were delisted last month are finally coming back, with Redfin data showing a record number of relisted properties in January.
Smith added that even a small gradual decline in interest rates could be enough to fuel the market this spring.
“If mortgage interest rates continue to fall, [sellers will] It gives them more flexibility and attracts more enthusiastic buyers,” he said.
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