- A new CNBC Housing Market Survey reveals most potential homebuyers are delaying purchases, expecting mortgage rates to fall further.
- Affordability remains the number one reason for the delay, even as 44% of real estate agents report that prices are decreasing in their local markets.
- The market is experiencing a “standoff,” with sellers still pricing homes for a hotter market and buyers waiting on the sidelines for better financing conditions.
- A staggering 89% of agents report their sellers have had to reduce their asking price to attract interest.
A Market on Hold: Buyers Bet on Lower Mortgage Rates
The majority of prospective homebuyers are pressing pause on their property searches, confident that mortgage rates will continue their recent downward trend. This collective decision to wait is the primary driver behind a cooling housing market, according to a new CNBC Housing Market Survey.
While rates for the popular 30-year fixed mortgage have eased to around 6.17%, the lowest in a year, it isn’t enough to entice buyers back into the market. The survey, which polled real estate agents across the United States, found that nearly three-quarters of agents say their clients believe rates have more room to fall. “My biggest challenge is when buyers hear predictions of future rate decreases, which in turn have buyers sit on the sidelines and wait,” said Maureen States, a Pittsburgh-based real estate agent.
The Great Affordability Standoff
Despite a majority of agents now considering current conditions to be a buyer’s market, affordability remains the single largest obstacle. The top concerns for buyers are, in order: high mortgage rates, economic uncertainty, and overall affordability. This has created a deadlock between motivated parties.
“Sellers are still pricing for a seller’s market, and buyers are willing to wait for prices and rates to drop,” explained Katie Kosnar, an agent in North Carolina. “It is a bit of a standoff, and folks are only moving if they absolutely must.”
Sellers Feel the Pressure
The impact of this buyer hesitation is being felt directly by sellers. The primary concern among sellers is now the length of time it will take to find a qualified buyer. This pressure is forcing them to make concessions.
The survey data highlights this trend starkly: about 89% of agents reported having at least one seller reduce their asking price. Nearly a third of agents said that more than half of their sellers have had to drop their prices to close a deal. Furthermore, approximately 40% of agents have had sellers delist their homes entirely, hoping to get a better price at a later date.
Navigating a Challenging Market
For the few buyers who are actively purchasing, creative strategies have become the norm. Many are using interest rate buydowns or turning to adjustable-rate mortgages (ARMs) for lower initial payments. The survey also found that 40% of buyers are borrowing money from family and friends to afford a home, while others are compromising on a home’s size, location, or features.
The market is further complicated by a lingering inventory problem. “For sellers who are locked in to a 3% [mortgage] rate, even though they may have a housing want or need, they may not be willing or able to make a move,” noted Holly David, an agent in Richmond, Virginia. This “rate-lock” effect keeps supply for affordable properties historically tight, leaving the entire market in a state of suspense, waiting to see where rates—and buyers—will go next.