Homeowners aren't selling anytime soon — regardless of how low mortgage rates go
More than half of all homeowners surveyed say they won't sell or refinance no matter the mortgage rate
Nathan Howard/Bloomberg via Getty Images
American homeowners say they have no plans to sell their homes or buy new ones this year, even if mortgage rates were to drop, a study released Monday found.
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Fifty-four percent of homeowners said in the study that there is “no mortgage rate” they would feel comfortable selling or refinancing at — and the same goes for buying another house, the Bankrate study found. This is a 12 percentage-point increase for selling or buying compared to last year’s Bankrate study on the same topic, which found that 42% of homeowners weren’t willing to sell and 38% weren’t willing to buy, regardless of mortgage rate changes.
Out of the group of American homeowners who said they would be open to buying a new home this year, about 75% said rates would have to fall below 5% for them to buy. Only 8% said they’d be comfortable buying again with rates at or above 5%. Last year’s study found that 15% would buy at or above 5%.
The last time rates for a 30-year fixed rate mortgage were under 5% was in March 2022, according to the Federal Reserve Bank of St. Louis. Since then, rates have risen as high as 7.79%, the bank said.
“Americans just aren’t ready to let go of those fond memories of 3% mortgage rates,” said Bankrate Housing Market Analyst Jeff Ostrowski in the study.
Mortgage rates are currently above 6% — and only 3% of homeowners say they’d sell at a rate this high, the survey found.
About 41% of homeowners with rates under 3% said they won’t buy, while 18% of homeowners with rates at 5% and higher said they would possibly buy again with similar rates. More than 60% of homeowners who would refinance said rates would have to drop under 4% for them to consider it, the study said.
The housing market is going through a rough time. Home delistings are rising as available inventory sits at over one million active listings, but buyers just can’t afford home prices and rates. The average American is getting priced out due to high costs, and mortgage application rates reflect that.