Mortgage Lock-In Effect Shows Signs of Easing as New Listings Increase
Rhea-AI Summary
According to the Realtor.com® September Housing Report, newly listed homes increased by 11.6% year-over-year, while actively listed homes rose 34.0%. This significant increase in listings is attributed to mortgage rates hitting a 24-month low following the Federal Reserve's 50 bps rate cut in September.
Key findings include:
- Median listing price decreased 1.0% to $425,000
- Median days on market increased by 7 days to 55 days
- Share of active listings with price reductions increased 0.5 percentage points to 18.4%
- Median list price per square foot increased 2.3% year-over-year and 50.8% compared to September 2019
The report suggests that the 'lock-in' effect, where homeowners with low mortgage rates were reluctant to sell, may be easing. Markets with more expensive homes saw the most growth in new listings, potentially due to the larger impact of falling mortgage rates in these areas.
Positive
- Newly listed homes increased by 11.6% year-over-year
- Actively listed homes rose 34.0% year-over-year
- Mortgage rates hit a 24-month low
- Median list price per square foot increased 2.3% year-over-year and 50.8% compared to September 2019
- Signs of easing in the 'lock-in' effect, with more homeowners willing to sell
Negative
- Median listing price decreased 1.0% to $425,000
- Median days on market increased by 7 days to 55 days
- Share of active listings with price reductions increased 0.5 percentage points to 18.4%
Insights
The September 2024 housing report from Realtor.com reveals significant shifts in the real estate market, primarily driven by a notable decrease in mortgage rates. The 11.6% year-over-year increase in newly listed homes suggests a potential easing of the "lock-in" effect, where homeowners were hesitant to sell due to their low mortgage rates.
Key points include:
- New listings increased by 11.6% YoY, reversing the previous month's decline
- Active listings rose by 34.0% YoY, indicating improved inventory
- Median listing price decreased by
1.0% YoY to$425,000 - Homes spent an average of 55 days on market, 7 days longer than last year
The increase in inventory and longer time on market suggest a shift towards a more balanced market, potentially benefiting buyers. However, the
The data reveals a nuanced market situation with regional variations. High-cost metros like Seattle, San Jose and Washington D.C. saw the largest increases in new listings, suggesting that lower mortgage rates are having a more significant impact in expensive markets.
The "lock-in" effect appears to be diminishing, with 84% of outstanding mortgages still below 6% but more homeowners willing to list. This could lead to increased market liquidity and potentially more normalized transaction volumes.
The slowdown in market pace (55 days on market) indicates a less frenzied buying environment, which could reduce pressure on buyers. However, the substantial
Investors should watch for potential opportunities in markets showing increased inventory and longer days on market, as these conditions may lead to more negotiating power for buyers.
Newly listed homes increased by
"Sellers, especially those who are locked into a low rate, have been waiting for market conditions to change. Now that we're seeing mortgage rates down to their lowest levels in two years, there are signs of movement, with more sellers putting homes on the market even in what's typically a real estate shoulder season," said Danielle Hale, Chief Economist, Realtor.com®. "We expect mortgage rates to hold around
September 2024 Housing Metrics – National
Metric | Change over Sept. 2023 | Change over Sept. 2019 |
Median listing price | - | +36.0 % |
Active listings | +34.0 % | -23.2 % |
New listings | +11.6 % | -11.8 % |
Median days on market | +7 days (to 55 days) | -7 days |
Share of active listings with price reductions | +0.5 percentage points (to | -1.0 percentage points |
Median List Price Per Sq.Ft. | +2.3 % | +50.8 % |
Chiseling Away at the "Lock-in" Effect
For the past few years, the real estate market has been plagued by the "lock-in" effect, whereby homeowners, who are locked into a relatively low mortgage rate, have been staying put, yielding a negative impact on available inventory. In fact, as of mid-2024,
Metros with Highest Increase in New Listings in September 2024
Metro | % change in New Listings count YoY | Median Listing Price |
41.8 % | ||
27.1 % | ||
26.2 % | ||
25.5 % | ||
24.4 % | ||
24.2 % | ||
22.6 % | ||
21.5 % | ||
21.5 % | ||
20.1 % |
The Slowest September Since 2019
Generally, buyers can look forward to not only an increase in inventory, but a little less time constraint as homes stay on the market longer. This September, the typical home spent 55 days on the market, which is seven more days than last year and two more days than August 2024. Compared to previous years, September 2024 marked the slowest one since 2019.
While the typical home on the market this September spent 55 days on the market, in certain metros that number is even higher. A look at the top 50 metros shows a typical home in
Home Values Grow
An increase in price-per-square foot indicates the growth in value of homes, and according to data in September 2024, homes are seeing sizable price growth compared to homes listed prior to the pandemic. The median listing price per square foot increased by
"Generally speaking, relief is brewing. On the one hand, buyers are seeing not only an increase in home listings but they're also seeing homes spend more time on the market, which means more options and less frenzy to buy," said Ralph McLaughlin, Sr. Economist, Realtor.com®. "For sellers, there's been positive movement in home value as indications show an increase in price growth since before the pandemic. And, all around, the decline in mortgage rates are lowering the barrier to entry and encouraging people to get into the market once again."
September 2024 Housing Overview of the 50 Largest Metros
Metro Area | Median Listing Price | Median Listing Price YoY | Median Listing Price per Sq. Ft. YoY | Median Listing Price vs September 2019 | Median Listing Price per Sq. Ft. vs September 2019 |
-2.7 % | 1.1 % | 31.7 % | 51.2 % | ||
-6.6 % | -4.1 % | 44.1 % | 54.8 % | ||
0.0 % | 1.7 % | 12.7 % | 28.1 % | ||
0.3 % | 1.4 % | 12.5 % | 26.5 % | ||
-1.1 % | 0.7 % | 42.5 % | 59.7 % | ||
6.8 % | 6.8 % | 34.5 % | 44.9 % | ||
1.2 % | 2.0 % | 26.7 % | 57.3 % | ||
1.3 % | 2.9 % | 19.3 % | 33.3 % | ||
-9.5 % | 3.3 % | 24.9 % | 50.7 % | ||
9.3 % | 14.0 % | 32.5 % | 48.4 % | ||
-0.6 % | 4.0 % | 29.7 % | 54.2 % | ||
-2.3 % | -0.1 % | 27.4 % | 43.3 % | ||
-6.0 % | 0.3 % | 22.9 % | 43.2 % | ||
5.7 % | 5.0 % | 13.7 % | 31.9 % | ||
3.1 % | 15.0 % | 38.3 % | 62.7 % | ||
0.0 % | -0.2 % | 18.8 % | 37.2 % | ||
-1.5 % | 3.8 % | 22.7 % | 52.7 % | ||
-6.1 % | -2.2 % | 32.3 % | 50.1 % | ||
-8.4 % | -2.1 % | 24.9 % | 42.3 % | ||
-1.0 % | 3.8 % | 48.4 % | 55.1 % | ||
-1.7 % | 1.9 % | 37.8 % | 47.7 % | ||
0.6 % | 3.4 % | 20.3 % | 41.7 % | ||
8.5 % | 0.0 % | 45.4 % | 60.9 % | ||
-12.4 % | -9.1 % | 31.5 % | 42.8 % | ||
11.4 % | 7.6 % | 44.5 % | 44.4 % | ||
-2.8 % | 0.9 % | 26.1 % | 32.0 % | ||
-5.4 % | 0.7 % | 47.4 % | 61.8 % | ||
-3.0 % | -1.2 % | 14.0 % | 25.0 % | ||
6.3 % | 8.8 % | 32.4 % | 72.7 % | ||
-4.6 % | -0.5 % | 24.7 % | 40.9 % | ||
-5.6 % | -1.6 % | 34.1 % | 52.0 % | ||
8.4 % | 5.9 % | 28.8 % | 51.0 % | ||
-2.3 % | -0.5 % | 35.3 % | 51.4 % | ||
-1.5 % | 5.2 % | 22.9 % | 29.9 % | ||
-3.2 % | 0.0 % | 28.5 % | 38.3 % | ||
3.2 % | 6.1 % | 49.6 % | 47.1 % | ||
-1.4 % | 2.3 % | 23.3 % | 51.3 % | ||
0.7 % | 4.0 % | 37.1 % | 56.2 % | ||
3.5 % | 2.2 % | 45.1 % | 58.0 % | ||
13.0 % | 8.5 % | 35.9 % | 42.6 % | ||
-2.3 % | 0.7 % | 29.7 % | 37.7 % | ||
-2.8 % | -2.2 % | 18.9 % | 36.9 % | ||
-5.0 % | 1.1 % | 41.5 % | 59.1 % | ||
-8.9 % | -6.2 % | 6.6 % | 22.4 % | ||
2.4 % | 2.6 % | 27.6 % | 27.5 % | ||
-3.3 % | -0.4 % | 31.0 % | 47.8 % | ||
7.1 % | 7.1 % | 34.6 % | 31.3 % | ||
-5.5 % | -2.7 % | 47.6 % | 63.6 % | ||
2.8 % | 5.0 % | 33.8 % | 44.6 % | ||
-2.4 % | 4.4 % | 26.3 % | 53.8 % |
Metro Area | Active Listing Count YoY | New Listing Count YoY | Median Days on Market | Median Days on Market Y-Y (Days) | Price– Reduced Share | Price-Reduced Share Y-Y (Percentage Points) |
52.7 % | 11.5 % | 50 | 7 | 17.5 % | 2.5 pp | |
22.9 % | -1.4 % | 72 | 14 | 25.0 % | -8.8 pp | |
24.7 % | 14.3 % | 38 | 1 | 27.4 % | 1.3 pp | |
29.5 % | 6.5 % | 54 | 5 | 28.2 % | 1.6 pp | |
29.8 % | 24.4 % | 31 | 0 | 16.5 % | 1.4 pp | |
13.9 % | 6.8 % | 40 | 1 | 10.8 % | 1.6 pp | |
61.0 % | 10.3 % | 48 | 8 | 19.0 % | 4.9 pp | |
13.8 % | 5.2 % | 36 | -1 | 25.9 % | 1.5 pp | |
34.5 % | 4.4 % | 38 | 6 | 25.9 % | 2.2 pp | |
11.6 % | -1.7 % | 39 | -1 | 17.3 % | 2.3 pp | |
39.2 % | 6.6 % | 37 | 7 | 21.9 % | 3.9 pp | |
49.3 % | 8.2 % | 53 | 9 | 13.6 % | 1.1 pp | |
61.7 % | 25.5 % | 50 | 12 | 20.4 % | 1.6 pp | |
16.5 % | 11.6 % | 39 | -2 | 22.2 % | 1.8 pp | |
13.5 % | 10.0 % | 33 | -5 | 17.3 % | 2.8 pp | |
29.9 % | 6.3 % | 48 | 4 | 18.5 % | -1.8 pp | |
23.8 % | 6.3 % | 45 | 6 | 17.0 % | -0.5 pp | |
61.9 % | 3.0 % | 65 | 15 | 17.0 % | 2.1 pp | |
25.3 % | 9.5 % | 52 | 2 | 17.9 % | 1.6 pp | |
47.3 % | 15.9 % | 44 | 1 | 9.4 % | 5.1 pp | |
46.9 % | 22.6 % | 46 | 1 | 24.2 % | 1.9 pp | |
31.4 % | 5.7 % | 38 | 6 | 23.3 % | 0.7 pp | |
36.5 % | -0.6 % | 62 | 16 | 15.7 % | -0.7 pp | |
67.9 % | 10.3 % | 73 | 15 | 26.2 % | 3.5 pp | |
7.8 % | 9.1 % | 31 | 1 | 20.1 % | 3.0 pp | |
18.5 % | 9.5 % | 40 | 4 | 26.4 % | -0.6 pp | |
30.6 % | 14.0 % | 52 | 15 | 17.4 % | -5.6 pp | |
19.4 % | -9.5 % | 79 | 13 | 19.1 % | -2.6 pp | |
1.6 % | 14.7 % | 57 | -3 | 14.7 % | 1.0 pp | |
37.6 % | 15.6 % | 45 | -1 | 15.5 % | 3.5 pp | |
68.6 % | 5.4 % | 65 | 15 | 4.7 % | 2.7 pp | |
14.1 % | 7.7 % | 45 | 0 | 20.1 % | 1.1 pp | |
48.8 % | 12.3 % | 56 | 17 | 25.0 % | 1.4 pp | |
21.2 % | 9.0 % | 50 | -1 | 18.2 % | 2.1 pp | |
27.9 % | 14.7 % | 58 | 13 | 13.6 % | 5.6 pp | |
32.6 % | 21.5 % | 35 | -1 | 11.2 % | 8.9 pp | |
48.4 % | 24.2 % | 51 | 8 | 17.3 % | 2.9 pp | |
27.6 % | 20.1 % | 43 | 1 | 17.2 % | 3.0 pp | |
40.3 % | 14.5 % | 54 | 5 | 28.1 % | 0.6 pp | |
16.6 % | 8.2 % | 38 | 21 | 21.5 % | -5.6 pp | |
49.0 % | 8.6 % | 44 | 7 | 13.9 % | 2.5 pp | |
22.3 % | -8.3 % | 67 | 16 | 17.5 % | -1.1 pp | |
77.2 % | 21.5 % | 40 | 5 | 25.0 % | 3.6 pp | |
27.6 % | 20.0 % | 33 | 4 | 27.4 % | 1.2 pp | |
39.3 % | 27.1 % | 31 | 2 | 28.2 % | 0.4 pp | |
67.9 % | 41.8 % | 43 | 6 | 16.5 % | 0.8 pp | |
12.4 % | 2.3 % | 45 | 7 | 10.8 % | 1.1 pp | |
74.0 % | -2.3 % | 66 | 22 | 19.0 % | 5.5 pp | |
26.4 % | 5.2 % | 41 | 5 | 25.9 % | 4.7 pp | |
23.1 % | 26.2 % | 36 | 1 | 25.9 % | -0.2 pp |
Methodology
Realtor.com housing data as of September 2024. Listings include the active inventory of existing single-family homes and condos/townhomes/row homes/co-ops for the given level of geography on Realtor.com; new construction is excluded unless listed via an MLS that provides listing data to Realtor.com. Realtor.com data history goes back to July 2016. The 50 largest
About Realtor.com®
Realtor.com® is an open real estate marketplace built for everyone. Realtor.com® pioneered the world of digital real estate more than 25 years ago. Today, through its website and mobile apps, Realtor.com® is a trusted guide for consumers, empowering more people to find their way home by breaking down barriers, helping them make the right connections, and creating confidence through expert insights and guidance. For professionals, Realtor.com® is a trusted partner for business growth, offering consumer connections and branding solutions that help them succeed in today's on-demand world. Realtor.com® is operated by News Corp [Nasdaq: NWS, NWSA] [ASX: NWS, NWSLV] subsidiary Move, Inc. For more information, visit Realtor.com®.
Media Contact
Asees Singh press@realtor.com
View original content:https://www.prnewswire.com/news-releases/mortgage-lock-in-effect-shows-signs-of-easing-as-new-listings-increase-302265947.html
SOURCE Realtor.com
FAQ
What was the year-over-year increase in newly listed homes for September 2024?
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What was the change in median list price per square foot in September 2024?
