The market continues to tilt towards a group of reluctant buyers
Mortgage rates and the average listing price have fallen while active inventory is rising year over year, but a more positive move may be needed for hesitant buyers this spring.
Current market moves are preparing homebuyers for an excellent spring homebuying season, but many are still reluctant to make a move, new reports show.
Mortgage rates have fallen significantly year over year on 30-year fixed rate loans, falling below 6 percent last week for the first time since 2022. As of Thursday, they rose again to 6 percent, according to Freddie Macwhich is still a big improvement over the 6.63 percent rate seen this time last year.
Meanwhile, active inventory is also up 6.8 percent year-over-year Realtor.com’s weekly housing trends reportgiving buyers more options so far this spring.
The average listing price fell 2.3 percent year over year, marking the 19th consecutive week of flat or negative year-over-year price growth, Realtor.com noted. Homes spent an average of 68 days on the market – five more days on the market than the same period last year – giving buyers some breathing room when it came to shopping.
“All indications are that there is a market ripe for buyers to make moves,” said Anthony Smith, senior economist at Realtor.com, in the weekly report.
Antonius Smit | Realtor.com
“The price correction we had been anticipating since the sales pace slowed and inventory started to recover has finally arrived,” he added.
However, despite these positive factors in favor of homebuyers, many potential buyers remain hesitant to enter the market.
Many potential sellers also still feel trapped by the pandemic-era 2 to 3 percent mortgage rates, which they say is too good to give up in the current environment. That hesitancy among sellers is reflected in the number of new listings, which fell 7.6 percent year over year, according to the Realtor.com report.
Some sellers who have taken the step to put their property on the market have grown tired of waiting for buyers and are unwilling to offer price reductions, taking their home off the market for the time being. Still, other sellers who have delisted in recent months are finally coming around, according to Redfin data, which shows a record number of property relistings in January.
If rates can move lower a little more, that should be enough to revive the market this spring, Smith added.
“If mortgage rates continue to fall, [sellers will] have more flexibility to make a move and a more enthusiastic group of buyers,” he said.
Email Lillian Dickerson
