Results from a recent Zillow survey, coupled with optimistic forecasts from housing experts, indicate that a tipping point is on the horizon for the mortgage industry. 

 

Zillow Finds Significantly Increased Percentage of Homeowners Looking to Sell Within the Next Three Years

 

There is reason to be optimistic about home inventory going forward. A July 2023 Zillow survey found that nearly 25% of homeowners are considering selling their home within the next three years, or currently have their home listed for sale. 

 

This figure is significantly higher than the 15% of homeowners who said the same just one year ago.

 

The quarterly survey also found that homeowners with a mortgage rate above 5% are nearly twice as likely to plan to sell their home than those paying a rate below 5%. 

 

Current Inventory Shortages Pushing Up Prices 

 

The current shortage of for-sale homes is pushing up prices. Zillow’s latest monthly report found that home values hit a record-high in June: $350,000 for the first time nationally. 

 

50 of the largest metro areas saw home value increases for the second month in a row. 

 

“It is critical to expand supply as much as possible to widen access to home buying for more Americans,” Chief Economist at NAR, Lawrence Yun, says. “Home prices will be influenced by how much inventory is brought to market. Increased homebuilding will tame price growth, while limited construction will lead to home price appreciation outpacing income growth.”

 

Fannie Mae, NAR, MBA Publish Optimistic Rate Forecasts 

 

Looking forward, Fannie Mae released a revised forecast model for 30-year fixed mortgage rates. The agency predicts rates drifting down to the low 6% range by the end of 2023, and further decreasing to the 5% range by the end of 2024. 

 

The National Association of Realtors (NAR) published a similar forecast, predicting 30-year fixed rates to slowly drift down through the 6% range from now until 2024. 

 

Mike Fratantoni of Mortgage Bankers Association (MBA) anticipates declining rates similar to Fannie Mae’s forecast on the horizon as well. 

 

Closing Thoughts

 

There are a number of tools available to help buyers understand how to make homeownership affordable and attainable. Between using mortgage calculators to create a monthly budget, searching for homes based on specific price points, and determining eligibility for down payment assistance programs, borrowers can still land a home they can afford. Reach out to your trusted mortgage professional to determine the best strategy for you and your family today.