Economists have long suggested that high mortgage rates have kept owners from selling their homes — but a new survey Bright MLS released Monday suggests that's not really the case anymore: It's what buyers are willing to pay.
The July survey polled roughly 1,000 agents in the mid-Atlantic region. It indicated that the share of homeowners who decided not to sell because they didn’t want to give up their mortgage rate decreased sharply from 34.5% to 15.6% compared to the same time a year earlier.
At the same time, the share of homeowners who decided not to sell because they didn’t get the price they wanted increased from 16% to more than 19% during the same period.
"For those sellers who decide not to sell, it is much less likely to be about mortgage rates,” Lisa Sturtevant, chief economist at Bright, wrote of the survey’s results. “Rather, a growing share of sellers is de-listing because they are not getting the price they want or for other financial and family reasons.”
In all, there was a slight increase in the number of sellers who exited the market this year compared to last year — 35% versus last year's 34%.
Seller activity is expected to outpace buyer activity
The survey results are just the latest evidence that the housing market is shifting in favor of buyers.
For one, home price growth has slowed in recent months, according to data from Homes.com. In June, prices had all but stagnated nationally, and some of the top 40 metropolitan markets even saw their prices decline. Moreover, the number of houses for sale has been on the rise in the U.S., giving buyers more options when choosing a home.
In other words, buyers have more choice and mobility in the market than in years past, meaning they can, for example, offer lower prices because there are more homes for sale.
But instead of a surge in buyer activity, a sort of mismatch has manifested, and the survey reflects that.
Respondents reported that “more would-be buyers are deciding to hold off on their home search,” with nearly 75% of surveyed agents saying they worked with such a client.
“In the current housing market with inventory rising, it is less about being frustrated at losing out on homes and more about general uncertainty,” Sturtevant said.
In fact, compared to last year, more buyers stopped their home search because of financial issues or uncertainty about the market, while fewer cited high home prices or elevated mortgage rates.
All told, agents said “they expect seller activity to outpace buyer activity for the first time since we started collecting this data in April 2023,” according to the survey.
“With more seller activity expected and buyer activity slowing, it is becoming increasingly likely that home prices will continue to soften, with the potential for year-over-year price declines in some local markets,” Sturtevant said. “Buyers who are in the market will have more negotiating power than they have had in years, while homeowners who need to sell will need to pay attention to pricing appropriately to attract buyers.”