Twenty-one percent of homeowners were considering selling as of the fourth quarter, up from 15% in the fourth quarter of 2022, according to a survey conducted by Zillow.
This shift in attitude likely stems from the fact that mortgage rates fell sharply in November and early December.
However, this willingness among some homeowners to break free of “rate lock” did not result in any meaningful increase in inventory, as competition for homes remains stiff, Zillows research shows.
“Buyers found significant savings as rates fell,” says Skylar Olsen, chief economist for Zillow, in the report. “But mortgage rates are fickle things, as we’ve seen in recent weeks, and they’ll play a massive role in determining appreciation and affordability — especially for first-time buyers — going forward in 2024.”
“Fortunately, rate lock appears to be wearing off for some homeowners, who show encouraging signs that they’re ready to come back to the market,” Olsen adds.
The average monthly mortgage payment has fallen $143 from October, helping to improve affordability.
But inventory levels remain far below pre-pandemic norms. Although inventory improved slightly in the fourth quarter it remained 36% below pre-pandemic averages.
The in-flow of new listings to the market in the fourth quarter was slightly better than a year earlier.
Although in-flows are 14.5% below pre-pandemic norms, they seem to be trending in the right direction, Zillow says.
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