Are More Homeowners Selling as Mortgage Rates Come Down?

Are More Homeowners Selling as Mortgage Rates Come Down?




If you’re looking to buy a home in Metro Detroit, the recent downward trend in mortgage rates is good news because it helps with affordability. But there’s another way this benefits you – it may inspire more homeowners to put their houses up for sale.

The Mortgage Rate Lock-In Effect

Over the past year, one factor that’s really limited the options for your move is how few homes were on the market. That’s because many homeowners chose to delay their plans to sell once mortgage rates went up. An article from Freddie Mac explains:

The lack of housing supply was partly driven by the rate lock-in effect. . . . With higher rates, the incentive for existing homeowners to list their property and move to a new house has greatly diminished, leaving them rate locked.”

These homeowners decided to stay put and keep their current lower mortgage rate, rather than move and take on a higher one on their next home.

Early Signs Show Those Homeowners Are Ready To Move Again

According to the latest data from Realtor.com, there were more homeowners putting their houses up for sale, known in the industry as new listings, in December 2023 compared to December 2022 (see graph below):

 

Here's why this is so significant. Typically, activity in the housing market cools down in the later months of the year as some sellers choose to delay their moves until January rolls around.

This is the first time since 2020 that we’ve seen an uptick in new listings this time of year. This could be a signal that the rate lock-in effect is easing a bit in response to lower rates.

What This Means for You

While there isn’t going to suddenly be an influx of options for your home search, it does mean more sellers may be deciding to list. According to a recent article from the Joint Center for Housing Studies (JCHS):

A reduction in interest rates could alleviate the lock-in effect and help lift homeowner mobility. Indeed, interest rates have recently declined, falling by a full percentage point from October to November 2023 . . . Further decreases would reduce the barrier to moving and give homeowners looking to sell a newfound sense of urgency . . .”

And that means you may see more homes come onto the market to give you more fresh options to choose from.

Bottom Line

As mortgage rates come down, more sellers may re-enter the market – that gives you an opportunity to find the home you’re looking for. Let’s connect so you’ve got a local expert on your side who’ll help you stay on top of the latest listings in our area. Message us for more information 248.755.3545

18 Properties
Page 1 of 2
$1,296 / month
Neighborhood: Virginia Park Sub
1
Beds
1
Baths
648
Sq.Ft.
1924
Year Built
1
Day on Site
20240050132
MLS
3
Beds
1F11/2
Baths
1,176
Sq.Ft.
1975
Year Built
4
Days on Site
61050147835
MLS
$225,000
Neighborhood: Northpointe Village Of Chesterfield Condo #817
2
Beds
2
Baths
1,395
Sq.Ft.
2014
Year Built
5
Days on Site
20240048493
MLS
Open 7/14
23040 Rosewood St Oak Park,  MI 48237
$199,999
Neighborhood: Oak Park Sub - Oak Park
3
Beds
1F11/2
Baths
845
Sq.Ft.
1950
Year Built
6
Days on Site
20240048225
MLS
Open 7/13
39479 N Blom Dr Dr Harrison Twp,  MI 48045
$349,900
Neighborhood: Cloverleaf Estates Sub
3
Beds
1F11/2
Baths
1,218
Sq.Ft.
1973
Year Built
15
Days on Site
58050146909
MLS
Open 7/13
2387 Country Club Davison Twp,  MI 48423
$389,999
Neighborhood: Atherton Country Club Estates No 2
4
Beds
2F21/2
Baths
1,768
Sq.Ft.
1992
Year Built
17
Days on Site
20240045452
MLS
$360,000
Neighborhood: Warner Creek Sub
5
Beds
3
Baths
1,426
Sq.Ft.
1988
Year Built
25
Days on Site
20240043033
MLS
$734,900
Neighborhood: Whispering Hills
4
Beds
2F11/2
Baths
3,288
Sq.Ft.
1987
Year Built
28
Days on Site
20240041826
MLS
$39,999
Neighborhood: Kaiser Gardens
2
Beds
1
Baths
652
Sq.Ft.
1938
Year Built
30
Days on Site
20240041664
MLS
$115,000
Neighborhood: Sawyers Keego Harbor Sub
0.18
Acres
30
Days on Site
20240041864
MLS
$229,900
Neighborhood: Scotts Addition
3
Beds
2
Baths
1,380
Sq.Ft.
1950
Year Built
33
Days on Site
20240039338
MLS
$410,000
Neighborhood: Lake Orion Groves Sub - Orion Twp
4
Beds
2
Baths
1,670
Sq.Ft.
1940
Year Built
51
Days on Site
20240035411
MLS

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