More listing opportunities may be on the horizon
Nearly a quarter of homeowners are considering selling in the next 3 years, according to a Zillow survey — a significant increase over prior surveys.
Key points:
- The number of homeowners who said they plan to list their house in the next few years is higher than it was in 2021 and 2022.
- The majority of prospective sellers said they wanted to move up to a nicer home, and half believed they would get more for their home if they sold sooner.
- Overall consumer sentiment suggests it’s still a strong sellers market.
While 3% mortgage rates were a blessing for many homeowners who bought or refinanced a home during the first two years of the pandemic, they've now become a curse.
For months, the inventory of existing homes has remained incredibly tight due to the reluctance of many homeowners to list their houses for sale and give up a historically low interest rate.
Instead of selling, some homeowners have opted to stay put, investing in renovations to add the extra space or new features they may have sought in a new home. Others have moved and kept their home as a rental, holding onto their low-rate mortgage.
However, a new report from Zillow suggests there may finally be a real, tangible uptick in existing home inventory over the coming years. The report, based on findings from the Zillow Group Population Science's Quarterly Survey of Homeowner Intentions and Preferences (QSHIP), found that 23% of current homeowners are looking to list their home for sale within the next three years.
That figure represents a sizable jump: Throughout 2021 and 2022, the percentage of homeowners who were considering selling in three years fluctuated between 14% to 19%.
Of those potential sellers, four out of ten said they may list in the next 12 months.
The top reason for wanting to sell was the desire to move up to a nicer home, 66% of respondents indicated. Half of respondents said they believed they would get more for their home now than in the future.
And they may be right: Last month, NAR's existing home sales report put the median sale price of existing homes at $410,200 in June — the second highest monthly median price for existing homes since NAR started tracking this data in 1999. The highest recorded monthly median price was $413,800 in June 2022.
Zillow's survey results showing increased interest in selling appear to align with overall consumer sentiment. In May, Fannie Mae's National Housing Survey found that only 19% of consumers said it was a good time to buy a home, while 65% said it was a good time to sell — up from the previous survey, and the highest percentage since July 2022.
While the number of respondents in the Fannie Mae survey who believe home prices will increase in the next year rose slightly, the majority of consumers (61%) expected prices to go down or stay the same, suggesting that they may be interested in selling sooner rather than later.