End of the Lock-In? More Listings Hit Market as Rates Dip

The Realtor.com® September Housing report is live, and the data shows some loosening of the mortgage rate lock-in effect as more sellers list their homes—with Q4 just around the corner. 

The recent drop in mortgage rates has made more sellers, as well as buyers, more willing to enter the market, especially as we approach the fourth quarter of the year, which typically brings a relative lull to the market as folks hunker down until the spring thaw. 

But for sellers motivated to move and buyers eager to become homeowners (or to move up from their current home) and who now have the buying power to match, the shift in market dynamics has given them the green light. 

September 2024 Housing Metrics (National):

• Median Listing Price: -1.0% (to $425,000) from September 2023; +36.0% from September 2019
• Active Listings: +34.0% from September 2023; -23.2% from September 2019
• Median Days on Market: +11.6% from September 2023; -11.8% from September 2019
• Share of Active Listings with a Price Reduction: +0.5 percentage points (to 18.4%) from September 2023; -1.0 percentage points from September 2019
• Median List Price per Square Foot: +2.3% from September 2023; +50.8% from September 2019

Sellers, especially those who are locked into a low rate, have been waiting for market conditions to change. Now that we’re seeing mortgage rates down to their lowest levels in two years, there are signs of movement, with more sellers putting homes on the market even in what’s typically a real estate shoulder season. We expect mortgage rates to hold around 6% through the end of the year, which is a significant difference from their 7.8% high in October 2023. This has increased the buying power of many home shoppers and is a bonus over and above the seasonal factors that make this time of year the Best Time to Buy.

Danielle Hale

Realtor.com® Chief Economist

Market Turnaround Following Mortgage Rate Drop

When mortgage rates dropped to a 24-month low, following the 50 basis point rate cut by the Federal Reserve, sellers took notice—particularly those locked into low rates (5% or lower) who’ve been waiting for rates to drop below 6.5%. 

New listings surged 11.6% in September 2024 compared to the same month last year, reversing a 0.9% decline in August 2024. 

Metros with the biggest annual increases in new listings in September 2024:

1. Seattle-Tacoma-Bellevue, WA (+41.8 %)
2. San Jose-Sunnyvale-Santa Clara, CA (+27.1 %)
3. Washington-Arlington-Alexandria, DC-VA-MD-WV (+26.2%)
4. Denver-Aurora-Lakewood, CO (+25.5%)
5. Boston-Cambridge-Newton, MA-NH (+24.4%)
6. Raleigh-Cary, NC (+24.2%)
7. Los Angeles-Long Beach-Anaheim, CA (+22.6%)
8. San Diego-Chula Vista-Carlsbad, CA (+21.5%)
9. Providence-Warwick, RI-MA (+21.5%)
10. Richmond, VA (+20.1%)

Active listings increased by 34.0% year over year in September, giving buyers more options to choose from. That combined with lower rates has drawn more potential buyers off the sidelines. 

Impact on the “Lock-in” Effect

The “lock-in” effect has been part of the post-pandemic “new normal” for some time now, with 84% of existing mortgages below 6% and 56% of them below 4%. 

But now, post-rate-cut, we’re seeing the highest level in new listings for any September since 2021—a clear sign of increased seller activity, particularly in high-cost markets where buyers benefit most from lower mortgage rates. 

Inventory and Pricing Trends

As for home sales, we’re seeing the slowest September since 2019, with homes lingering on the market for 55 days—seven days longer than a year ago. 

Metros with the highest median days on market include: 

• New Orleans (78 days—up 13 days from September 2023)
• Miami, FL (73 days)
• Austin, TX (72 days)
• San Antonio, TX (67 days)
• Tampa, FL (66 days)

Metros with the fastest home sales:

• Milwaukee, WI (31 days)
• San Jose, CA (31 days)
• Boston, MA (31 days)
• Hartford, CT (33 days)
• San Francisco, CA (33 days)

Meanwhile, home values have continued to grow. The median price per square foot rose 2.3% year over year, and compared to pre-pandemic levels in September 2019, home prices have increased by 50.9%. 

The New York metro area led home price growth with an increase of 71.9% since 2019, followed by Tampa, FL (+63.6%) and Hartford, CT (+62.3%).

Generally speaking, relief is brewing. On the one hand, buyers are seeing not only an increase in home listings but they’re also seeing homes spend more time on the market, which means more options and less frenzy to buy. For sellers, there’s been positive movement in home value as indications show an increase in price growth since before the pandemic. And, all around, the decline in mortgage rates are lowering the barrier to entry and encouraging people to get into the market once again.

Ralph McLaughlin

Realtor.com® Senior Economist

Read the full September Housing report on Realtor.com for more information, including metro-level data and methodology.