Pandemic-era buyers show most willingness to sell
Homeowners who bought in the early 2020s have lots of equity, and life events are motivating moves — even if they have to give up their low mortgage rates.
A new report from Bright MLS suggests that younger homeowners who bought during the pandemic are already looking to move up.
Data from a nationwide survey of more than 1,500 homeowners found that nearly one-third of the respondents who plan to sell their home in 2025 have lived in it for less than five years. That's in contrast to the trend of people staying in their homes longer — the current tenure is around 12 years, according to the U.S. Census Bureau.
Roughly 18% of the homeowners polled in late November said they are thinking about selling their home in the coming year.
Rolling in equity: A significant number of those who bought during the pandemic benefited from the rapid rise in home values during the housing boom of 2020-2022. That has provided them with enough equity to move up to something bigger or more expensive — even if it means trading in their low-rate mortgages for today's elevated rates, said Lisa Sturtevant, chief economist at Bright MLS.
"Record low mortgage rates during the pandemic were a huge incentive for individuals and families to buy a home. Many of these buyers also have been able to quickly accumulate significant equity in their homes as home prices have escalated," Sturtevant said.
In an email, Sturtevant said this phenomenon is a result of the unique market conditions in recent years: Interest rates fell to historic lows, bringing in a surge of buyers, then home prices soared, creating ample equity for homeowners to move up faster than usual.
Boomers are staying put: The biggest group of prospective sellers among those surveyed is homeowners in their 30s and 40s who are hitting various milestones including marriage, starting a family and making a career move.
Older homeowners, on the other hand, are happy where they are, according to the survey. Only 6% of homeowners age 60+ said they were planning to sell their home in 2025, with downsizing cited as the top motivator.
But most boomers said they have no reason to sell, and nearly 60% have lived in their current home for more than two decades and are no longer paying a mortgage. That's consistent with a Redfin report from earlier this year which found that most boomers are content to stay in their often larger homes, because they would likely take a financial hit if they sold a paid-off home to downsize to a smaller home with a mortgage.
Not feeling locked in: The survey found that around 30% of homeowners in their 30s and 40s who plan to move have an interest rate below 4%, while nearly all have a rate under 5%.
Asked why homeowners with low rates might decide to sell in 2025, Sturtevant said life events eventually outweigh mortgage rates. There's also an expectation that mortgage rates will remain elevated, so buyers aren't waiting around for lower rates.
"These homeowners have enough equity so they can put a big down payment down and the higher mortgage rates won't feel as big of a blow," Sturtevant said. "And these life changes have been building up over the past few years, so some of these homeowners are getting to the breaking point where the new family situations simply make their existing housing untenable."