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,” says 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.”
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.
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 August 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,” says Hannah Jones, Realtor.com’s 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.”