Housing Market Update: What Buyers and Sellers Need to Know

FILE – A for sale sign is displayed outside of a home for sale on Aug. 16, 2024, in Los Angeles, California. (Photo by PATRICK T. FALLON/AFP via Getty Images)

SEATTLE – While buyers and sellers didn’t all get back into the housing market in February as expected, lower mortgage rates could energize them in March, according to new Zillow research.

The recent change in mortgage rates could have enough of an impact to offer significant savings for prospective buyers, while also helping to convince homeowners to finally list.

RELATED: These were the 5 hottest housing markets in February, according to Realtor.com

Here’s what to know:

What’s Going On with Mortgage Rates?

What we know:

Mortgage rates fell by about a quarter of a point over the course of February and have staggered a bit downward in March – now reaching lows not seen since December 2024, Zillow said.

Last week, the rate averaged 6.65%, according to mortgage buyer Freddie Mac. A year ago, it averaged 6.74%.

Big Picture View:

When looking at monthly payments on a mortgage, a slight change in rates can provide significant cost savings for prospective buyers. It can also help entice some fence-sitting homeowners to finally put their property on the market, Zillow noted.

What They’re Saying:

“Affordability is still a massive challenge for those who have been waiting to buy a home, but the lower rates we’ve seen so far in March are taking the edge off,” Skylar Olsen, Zillow chief economist, said in a statement. “Rate dips tend to energize buyers and sellers both; if they continue or hold, we should see more activity.”

“Economic uncertainty is a counterbalance, one that will be felt in some areas of the country more than others,” Olsen added. “People tend to shelter in place when the future of their job or industry is uncertain.”

Where Buyers Benefit

What We Know:

Beyond costs, Zillow said homebuyers are benefitting in a few areas of the market. First, 1.04 million homes were on the market last month, more than in any February since 2020, and 15% more than last year – meaning they’ll see more options.

This also means that competition among buyers is slower with more homes for sale. Listings are currently spending about 23 days on the market before a sale is pending, according to Zillow – which noted how that’s six more days than in 2024 and just four fewer than at this time pre-pandemic.

RELATED: Almost 40% of Americans receive financial help from family to buy a house: Survey

What Sellers Should Know

Dig Deeper:

Newly pending listings fell by nearly 8% compared to the prior year, Zillow said. But nationally, they still stand about 10% above pre-pandemic norms.

Zillow noted how sellers nationwide should expect to get the highest sale premium from now through the end of July.

RELATED: Map: Here’s the best month to list your home based on where you live

Best US Markets for Buyers and Sellers

Zillow shared the top five least competitive U.S. markets, meaning the best for buyers right now:

• Miami
• New Orleans
• Jacksonville
• Tampa
• Memphis

On the opposite end, here are the most competitive markets, or the best for sellers right now:

• Buffalo
• San Jose
• San Francisco
• Hartford
• Boston

Conclusion

In conclusion, the housing market is showing signs of improvement, with lower mortgage rates and more homes available for sale. While affordability is still a challenge, the current market conditions are providing opportunities for both buyers and sellers. As the market continues to evolve, it’s essential for buyers and sellers to stay informed and adapt to the changing conditions.

Frequently Asked Questions

Here are some frequently asked questions about the current housing market:

Q: What is the current state of the housing market?

A: The housing market is showing signs of improvement, with lower mortgage rates and more homes available for sale.

Q: What are the best markets for buyers and sellers?

A: The best markets for buyers are Miami, New Orleans, Jacksonville, Tampa, and Memphis, while the best markets for sellers are Buffalo, San Jose, San Francisco, Hartford, and Boston.

Q: How will the current market conditions affect buyers and sellers?

A: The current market conditions will provide opportunities for both buyers and sellers, with lower mortgage rates and more homes available for sale. However, affordability is still a challenge, and buyers and sellers need to stay informed and adapt to the changing conditions