Some Homeowners Selling Now, Despite High Interest Rates
New York, NY, April 22, 2024-"Not everyone can wait out the toughest housing market in years,” reports the Wall Street Journal.
“Sellers are listing homes because they need to relocate, even if it means giving up superlow mortgage rates. Empty-nesters need to move to places without stairs and with walk-in showers. Growing families that are spilling out of starter homes need to upsize.
“In year three of the Federal Reserve’s high-rate policies, some home sellers and buyers are giving up waiting for the central bank to change course. With inflation still elevated, the Fed is in no rush to cut its own rates. Mortgage rates once again rose above 7% this week.
“‘We can’t just let our kids grow up while the Fed figures out what they think about inflation,’ said Luke Bolton, who listed his home in March and expects to close soon on a purchase.
“The housing market needs more sellers like these to bounce back. Existing-home sales fell in March, marking a sluggish start to spring home-buying. Sales in 2023 dropped to the lowest level since 1995.
“Still, new listings over the last four weeks are up 11% from a year earlier, according to real-estate brokerage Redfin. Today’s sellers typically say they are encountering a cooler market. They have been getting three offers per listing in recent months on average, down from five offers when mortgage rates were notably lower a few years ago, according to the National Association of Realtors.
“Homes spent a median of 48 days on the market in February, compared with 26 days two years earlier, according to Redfin.
“But many have owned their homes long enough to accrue significant equity. A sale could give them cash to put in the bank or toward a new house.”