Home Buyers Are Ready to Buy. But Sellers Aren’t Selling.

livemint.com:

The lowest mortgage rates since the summer are starting to lure frustrated home shoppers back to the market. The problem is that few homeowners who have locked in much lower rates appear ready to sell. Home sales this year are on track to be the lowest since at least 2011.

But as mortgage rates retreated from nearly 8% in October to below 7% last week, buyers are responding. Mortgage applications have increased for six straight weeks on a seasonally adjusted basis, though they are still down from year-ago levels, according to the Mortgage Bankers Association. Real-estate agents say they expect more buying activity in the new year, after home shoppers return from a break over the holidays.

“There’s just a lot of pent-up demand," said Lisa Sturtevant, chief economist at Bright MLS, a real-estate listings database that covers parts of six eastern states and Washington, D.C. “There’s a lot of people out there who are still waiting to get into the market, and they’re making it work however they can." Home-buying affordability, which hit the worst level in decades this fall, is improving. The typical housing payment for a buyer purchasing a median-priced home with a 20% down payment was $2,503 in the four weeks ended Dec.

10, the lowest level since April, according to real-estate brokerage Redfin. That buying appetite is poised to grow further owing to the recent retreat in mortgage rates. According to Freddie Mac, the average rate on a 30-year fixed mortgage has declined for seven straight weeks, falling to 6.95% as of Dec.

14 after hitting a two-decade high of 7.79% in October. The most significant constraint is the shortage of homes on the market. Many homeowners who locked in low mortgage rates in recent years are