Hesitant home sellers could be one reason there is such low housing inventory, according to a report from Zillow. Thirty-four percent of would-be home sellers said they are staying out of the market due to the uncertainty caused by COVID-19.
That uncertainty includes financial anxiety, which is keeping 31% of homeowners from selling in the next three years, according to the report.
A recent change in employment was a barrier to finding a new home for 27% of those who responded, while 17% said another reason was that their spouse or partner was laid off or involuntarily unemployed. On the other hand, one out of 10 homeowners said they weren’t selling because an adult child or other family member had moved in with them during the pandemic.
Nearly 40% of homeowners who said they would consider selling in the next three years said that they anticipate a more favorable price if they wait.
“Potential sellers are likely correct that home prices have yet to reach their peak, but in the long run, prices tend to rise, so there’s no clear ‘right time’ to sell,” Zillow Senior Economist Jeff Tucker said. “Homeowners who feel life is uncertain right now may think they can still get a strong price if they delay selling until they have more clarity.
“The catch is that waiting to sell may raise the cost of a trade-up. This fall’s record-low mortgage rates, which make a trade-up more affordable on a monthly basis, are not guaranteed to last,” Tucker said.
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The difficulty of finding a new home is definitely weighing on some consumers, as 31% of homeowners in the survey who were considering selling in the next three years said their plans paused because they are concerned about finding or affording a new home.
Of those who are hesitant to put their home on the market, virus safety was one of the least frequently cited concerns among homeowners. Only 25% of potential sellers said they weren’t selling because they were concerned about their household’s health and safety during COVID-19.
Taking advantage of mortgage forbearance was the reason 6% of homeowners who were considering selling in the next three years decided to stay put.
And those who have just refinanced are also unlikely to sell soon. Record-low mortgage rates are the reason 15% said a recent refinance was a reason not to list their home for sale.