As rates drop, more homeowners are considering selling. (iStock)
Homebuyers have struggled over the last few years as listings hit all-time lows. But one in five homeowners are now considering selling, a Zillow report stated.
About 21% of buyers are considering selling in the next three years, up from 15% last year, the Zillow report found. While fewer listings are on the market right now, largely due to the winter season, they’re still up by 2.1% compared to this time last year.
Buyers also aren’t being priced out as frequently. The report showed 29.4% of homes sold above their asking price in November – a 2.4% drop from October. However, the number of homes selling at or below their listing price hasn’t returned to pre-pandemic levels when just 20% of homes sold for more than they were listed.
More homeowners are interested in selling within the next few years, likely in large part due to falling interest rates.
“Buyers found significant savings as rates fell,” Zillow Chief Economist Skylar Olsen said in a press release. “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.”
If you’re considering buying a home this year, one way to ensure you get the rate you deserve is to compare your lender options. Credible helps you compare different lenders and rates in just a few minutes.
HOME BUYERS STRUGGLE IN 2023, BUT HOMEOWNERSHIP RATE COULD RISE IN 2024
Rates set to drop below 6% this year
The average 30-year mortgage interest rate is set to drop below 6% by the end of 2024, Fannie Mae recently announced. The company is confident that volatile mortgage rates and the effects of the pandemic will begin to lessen as the housing market slowly trudges toward normal patterns.
While the housing market could see better times in the year ahead, 2023 saw the lowest share of affordable homes on the market, a Redfin release showed. About 15.5% of homes were deemed affordable last year, down by about five percentage points from 2022. Before the pandemic, 40% of homes were considered affordable.
Although interest rates are dropping, many homeowners still have interest rates well below the 6% mark. Nearly 89% of current homeowners have a rate below 6%, Redfin reported at the beginning of January. Other homeowners also have rates below 5% and 4%. Until rates drop this low, many homeowners are likely to hold on to their homes a little longer.
If you are trying to find the best mortgage rate, you could start by using Credible. Credible can show you current mortgage rates from multiple lenders and help you make an informed decision regarding your home loan.
MORTGAGE RATES FINALLY EXPECTED TO DIP BELOW 6% IN 2024, BUT AFFORDABILITY REMAINS LOW
Home sales surging in these states in 2024
Home sales in certain states are set to go up over others as buyers seek out more affordable areas. Many of the areas expected to see growth in home sales are those that saw serious declines in home purchases the last few years as home prices skyrocketed, a Realtor.com article reported.
Coming out on top is Toledo, OH, expected to grow 14% in home sale counts year-over-year and the Oxnard-Thousand Oaks-Ventura, CA area, expected to grow by 18% in home sales.
Also on the list are major metro areas in the Northeast, such as Worcester, MA, with an expected growth rate of 9.1%, and Springfield, MA, set to grow by 10.5%. These areas are growing over other major cities like New York and Boston because they offer more affordable options while still providing city living, Realtor.com reports.
But the West is a different story, with specific areas expected to grow and others expected to decline significantly. California’s top five metros – Oxnard, San Diego, Riverside, Bakersfield and Los Angeles – are likely to see a sales growth rate of 13.1%. California’s other costly metro areas will see an average decline of 4.1%.
If you live in an area seeing an uptick in listings and are considering buying, make sure you’re securing a good interest rate. Use a lender marketplace like Credible to view your lenders and rate options all in one place.
HOMEOWNERS INSURANCE RATES ON THE RISE, MAINLY DUE TO INCREASE IN NATURAL DISASTERS
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