"If sellers bought when mortgage rates bottomed out at 2.65% in January 2021, they may be reluctant to give up their own low rate for a higher one. Inventory is also scarce in many areas. Although markets vary across the country, it may be difficult to find a new house, whether that's across town or in a different state. Many sellers who don't want to rent are reluctant to give up their home without first finding another."
"Mortgage rates are not actually tied to the Fed Funds Rate, which got cut by a quarter percent. Instead, they follow the bond market. That means mortgage rates fluctuate daily, and the rate today may be higher or lower than the rate tomorrow or last week. The other challenging factor is that the mortgage rate is just one part of the economy. With inflation hovering near 3%, sluggish job growth, and political uncertainty, sellers may still be reluctant to list, even after the Fed's rate cut."
Fed cut interest rates by 0.25 percentage point on Sept. 17, with potential further cuts into 2025. Mortgage rates do not directly follow the Fed Funds Rate and instead track the bond market. Sellers who obtained 2.65% mortgages in January 2021 are reluctant to trade those low rates for higher ones. Low inventory and regional market differences make finding replacement homes difficult, and some sellers avoid renting. Late 2024–early 2025 data showed about 43% of sellers reduced asking prices, more than those receiving above-asking offers. Inflation near 3%, weak job growth, and political uncertainty further discourage listing. Agents can use targeted strategies to persuade hesitant sellers.
Read at www.housingwire.com
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