-
Zillow reports that a new wave of inventory hit the market in February.
-
New listings for existing homes on Zillow increased 21% last month compared to a year ago.
-
This data suggests a 'lock-in' effect and a softening of the frozen housing market.
Since the pandemic, high mortgage rates, soaring home prices and a lack of inventory have kept many Americans out of the housing market.
But as more sellers start putting their homes on the market, the “lock-in” effect, where current owners are reluctant to move or refinance at higher interest rates, is showing signs of easing. New listings for existing homes increased 20.8% in February compared to the same period in 2023 and increased 20.3% month-over-month, according to Zillow data released Thursday.
Not only that, but a survey of homeowners suggests that an increasing proportion of homeowners plan to sell over the next three years, with some households waiting for interest rates to drop. It has been suggested that it may return to the market.
Zillow reported that total inventory in February was up 3.4% from January, and active listings were up 12% last month compared to a year ago.
Inventories increased the most in 33 of the 50 largest U.S. markets, with Dallas (38.8%), Tampa (30.7%) and Orlando (29.5%) increasing inventory.
On Thursday, the average 30-year fixed mortgage rate rose slightly to 7.02%.
Even if mortgage rates fall this year, Capital Economics strategists don't expect homebuying activity to increase significantly. In fact, they don't expect price increases to end in the short term, expecting house prices to rise by 5% in 2024, above the consensus of 3%.
“Even if mortgage rates fall to 6% as we expect, the 'fixing' of mortgage rates will continue to discourage home relocation,” the strategists said. “As a result, we expect only a small amount of new resale supply to come to the market over the next few years.”
Read the original article on Business Insider
