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January 31, 2024

Are More Sellers Preparing to List their Homes?

a home for sale sign in front of a house

If you’re in the market for a new home, you’ve probably been following the headlines. There’s been a downward trend in mortgage rates which can help with housing affordability, but there have also been fewer homes on the market for you to consider buying. The good news is that lower mortgage rates may inspire more homeowners to put their houses up for sale.


The Mortgage Rate Lock-In Effect

One factor that has limited the options for homebuyers is the low levels of inventory that were available for sale. Many homeowners chose to delay their plans to sell once mortgage rates went up. Freddie Mac explains:


“The lack of housing supply was partly driven by the rate lock-in effect . . . With higher rates, the incentive for existing homeowners to list their property and move to a new house has greatly diminished, leave them rate locked.”[1]


These homeowners decided to stay put and keep their current lower mortgage rate, rather than move and take on a higher one on their next home.


But There Are Signs This is Changing

According to the latest data from Realtor.com[2], there were more homeowners putting their houses up for sale, known in the industry as new listings, in December 2023 compared to December 2022 (see graph below):

sellers are re-entering the market new listings count each december

This is significant. Typically, transactional activity in the housing market slows down in the later months of the year as some sellers choose to delay their moves until the new year.



This is the first time since 2020 that we’ve seen an uptick in new listings this time of year. This could be a signal that the rate lock-in effect is easing a bit in response to lower rates.

a man is holding a key with a house keychain attached to it

What This Means for You

While there will not suddenly be an influx of options for your New York-regional home search, it does mean that more sellers may be deciding to list. According to a recent article from the Joint Center for Housing Studies (JCHS):


“A reduction in interest rates could alleviate the lock-in effect and help lift homeowner mobility. Indeed, interest rates have recently declined, falling by a full percentage point from October to November 2023 . . . Further decreases would reduce the barrier to moving and give homeowners looking to sell a newfound sense of urgency . . .”[3]


This means you may see more options coming to the market in the coming months and more homes to choose from.

a woman is sitting in front of a laptop with her arms in the air

Final Thoughts

As mortgage rates come down, more sellers may re-enter the market – that gives you an opportunity to find the home you’re looking for. Connect with your local real estate expert to stay on top of the latest listings in our area, and make sure you sign up for Text Alerts at www.onekeymls.com to be alerted to the newest listings that meet your saved search criteria.

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