Although research in June 2023 indicated 5% could be the "magic" mortgage rate that would motivate homeowners to sell their homes, with those homeowners who had a mortgage rate above 5% being almost twice as likely to consider selling than homeowners below 5%, recent data show mortgage-rate fluctuations have had less impact on homeowners' selling intentions than expected.
After reaching a peak of 7.79% at the end of October 2023, mortgage rates began to fall, and by December the average rate had dropped to 6.61%. But that rate drop wasn't matched by an increase in intentions to sell for homeowners who had mortgage rates above 5%, real estate website Zillow finds. In fact, Zillow reports that, despite the rate drop at the end of 2023, higher-mortgaged homeowners were still likely to be financially cautious, holding off on selling and buying a different home due to economic uncertainty and stagnant home prices.
In contrast to 6 months ago, a recent survey from Zillow Group Population Science now shows that the “plans to sell” gap between mortgaged homeowners below and above 5% has shrunk.
In September 2023, the gap shrunk to a 5 percentage-point difference between higher- and lower- rated homeowners. By December 2023, the gap was no longer statistically different (22% for homeowners with rates below 5% and 23% for homeowners with rates above 5%).
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