Sellers Motivated by Rates, Bullish on Sale Prices
A new Realtor.com survey indicates homeowners thinking about selling are closely monitoring mortgage rates as they await the right moment to enter the market.
Mortgage rate sensitivity — especially concern that already high mortgage rates might continue ticking upward — could play a key role in seller behavior in the coming months.
According to a recent Realtor.com survey, more than 3 in 4 potential sellers (78%) think mortgage rates will either stay elevated or rise over the next 12 months. Among the 45% who suspect rates will increase, nearly half (43%) said that expectation “increases their likelihood to sell.” Of the 22% of potential sellers who believe interest rates will decline, 69% identified this expectation as a reason to sell.
The survey data “suggests that potential sellers are motivated by interest rate changes,” Hannah Jones, a senior economic research analyst at Realtor.com, said in a press release.
And more changes are likely. The survey was conducted in March, prior to President Donald Trump’s April 2 tariff announcement that caused mortgage rates to surge. Rates have since eased slightly, but some experts predict a “mortgage rate roller coaster” in the months ahead.
In addition to rate sensitivity, sellers may be considering broader economic factors when deciding whether to list. The recent rise in new listings, which were up 10.3% year-over-year in early April, according to Redfin, could be a result of some sellers looking to cash in on their equity before a potential economic downturn, researchers suggested.
Waiting for the right moment: Still, most sellers aren’t making a hasty decision based on current events. A majority (61%) of the 801 respondents in the Realtor.com survey said they have been thinking about selling for at least one year. What’s holding them back? For many (55%), the mortgage rate “lock-in” effect continues to be a deterrent, especially since two-thirds of potential sellers plan to buy another home, “which means their next mortgage will likely have a higher rate,” the report noted.
Even so, a solid 81% of potential sellers expressed optimism about getting their asking price — or more — when they decide to list their home, driven in part by high home prices that have continued to rise nationally.
Seller outlook tied to local market conditions: Potential sellers in the Northeast, where housing inventory remains the most constrained, are the most confident that now is a good time to sell, with 80% strongly agreeing with that sentiment, compared with 72% in the West, 69% in the South and 65% in the Midwest.
Sale price confidence also differed by region, with potential sellers in the West more likely than sellers in other regions to say they expect to get above asking price. Only 6% of potential sellers in the West thought their homes would sell for below ask, compared with 16% of sellers in the Northeast, 15% of sellers in the South and 15% of those in the Midwest.
Motivations for selling: When asked why they want to sell, “looking for a different community” was the respondents’ top reason, with 46% listing that as a motivation, followed by making a profit.
But necessity was also a common driver. One or more “need to move” reasons — needing more space; needing to downsize; moving for family, work or a life event such as marriage or divorce; or selling because they can no longer afford their home — were cited by nearly 80% of would-be sellers.
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