Why Many Homeowners Don't Want to Sell

As you likely know, the housing market has been struggling with inventory for years.
Years of low production from home builders certainly play a part in this shortage, but an increase in construction isn’t the fastest way to solve the issue. Existing homeowners —many of whom are currently hesitant to sell — factor in, too.

​Here’s what is keeping homeowners in place (and how it impacts housing supply).

• Low Inventory: As mentioned above, low inventory has a roundabout effect. Because there are fewer homes to choose from, some homeowners fear entering the market and not having many options. As a result, they stay put, keeping supply low.
• Mortgage Rates: About 80% of current homeowners with outstanding mortgages have interest rates below 5%, so selling their home (and financing a new one) would mean trading their low rate for a higher one. Many would rather wait for rates to drop before selling their homes.
• Rising Home Costs: Some homeowners don’t want to enter the market simply because of home affordability. Home prices are up, as are homeowners insurance costs and, in many areas, property taxes.
• Aging in Place: For older homeowners, aging in place is a more appealing option than finding and getting used to an entirely new property. Many opt to renovate their existing homes for accessibility instead.