Survey: 82% of Home Sellers Feel ‘Locked In’ by Low Mortgage Rate

SANTA CLARA, CA—While the best time to sell your home is upon us, there is one major issue holding sellers back—high mortgage rates. According to a new survey released on April 17 from Realtor.com and HarrisX, the vast majority (86%) of those planning to sell their home in the next 12 months are also planning to buy a new home. And because most of these sellers will be taking on a new mortgage, this creates a major affordability hurdle. In fact, 82% of these seller-buyers feel “locked in” by their current low mortgage rate. As a result, more than half of seller-buyers (56%) who are planning to sell in the next 12 months said they are waiting for rates to come down, while 25% need to sell soon for personal reasons.

“One positive aspect that came out of the pandemic was historically low mortgage rates—and many people took advantage of this opportunity to buy their first home, upgrade to a more expensive home or refinance the home they were in,” said Realtor.com Chief Economist Danielle Hale. “Unfortunately, this comes with a bit of a catch-22, as homeowners who locked in a 30-year fixed rate in the 2%-3% range don’t necessarily want to give that up in exchange for a rate in the 6%-7% range.” Realtor.com is operated by News Corp. subsidiary Move, Inc.

Home Equity at All-Time Highs

The good news for sellers is that they have a lot of equity in their current home. Eighty-five percent of potential sellers are happy with the amount of equity they have in their home. Specifically, 74% estimate that they have more than $100,000 in home equity and 20% estimate that number to be more than $300,000.

Sellers Still Have Sky-High Expectations

Despite higher mortgage rates, sellers still have high expectations for their home sale, in many cases even higher than potential sellers who were surveyed in Aug. 2022. Thirty-three percent of potential sellers said that they want to take advantage of the current market and think they can make a profit. Even in this shifting market:

• 43% expect to get their asking price (up from 27% in 2022).

• 37% expect to have an offer within a week (compared to 33% in 2022).

• 35% expect buyers to be willing to forgo contingencies like inspections and appraisals to make the deal (compared to 30% in 2022).

• 34% expect an all-cash offer (up from 22% in 2022).

• 31% expect to get more than their asking price (compared to 30% in 2022).

27% expect a bidding war to take place (compared to 32% in 2022).

“Given the changing housing market, it’s important for buyers and sellers alike to have realistic expectations heading into a home sale,” said Hannah Jones, Realtor.com economic data analyst. “By understanding the local market, sellers can make sure that they’re pricing their home well to help ensure a quick sale and avoid a home that lingers on the market.”

The survey was conducted online from Feb. 3-10, 2023, among 2,286 adults in the U.S. by HarrisX. The sampling margin of error of this poll is +/- 2.1 percentage points and larger for subgroups. The results reflect a nationally representative sample of U.S. adults. Results were weighted for age by gender, region, race/ethnicity, and income where necessary to align them with their actual proportions in the population.

Last month, Realtor.com reported the results of a survey that indicated that this week is most likely to get home sellers the best possible outcome. Nationally, homeowners who list the week of April 16-22, 2023 will hit the sweet spot in terms of the best combination of higher prices, fewer homes to compete against, faster sales time and strong buyer demand. The survey from Realtor.com and HarrisX found that 60% of home sellers took up to three months to get their home ready to list, so for homeowners who have been making preparations, listing during that crucial April week could get $48,000 more for their home than they would have at the start of the year.