Are Huntsville homeowners "locked in?"
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One bright spot in this bummer housing market: More listings are shaking loose.
Why it matters: Some homeowners sitting on low mortgage rates are finally selling, including in Huntsville, where inventory is on the rise.
By the numbers: Inventory in 20 of the 50 largest U.S. metros topped pre-pandemic norms in April, up from 18 in March, per Realtor.com.
Yes, but: The mortgage "lock-in effect," as experts call it, isn't going away anytime soon.
- In all 50 states, over half of mortgages have rates below 4%, according to Cotality, an industry data provider. Nationally, it's 62%.
- Alabama's breakdown is 56% below 4%; 17% between 4-5%; 10% between 5-6%; and 16% above 6%.
What they're saying: "I don't think they're locked in here," Huntsville Area Association of Realtors President Tamara Fox tells Axios. People realize those rates aren't going back to the 2-4% range anytime soon, and are making moves they need to make.
- Locally, the market is coming off a 12-year upswing and is starting to get back to a more balanced market, she said. The local market has four-and-a-half months of inventory, and a buyers' market is typically marked by six months of inventory.
Context: Homes are definitely hitting the market around Huntsville. Madison County data from HAAR shows an increase of nearly 40% year-over-year for March 2025.
- The largest increase was in homes priced between $150,000-$200,000, a 141% jump compared to the first quarter of 2024, and a critical need in the market, Fox said. The median sales price of all homes was $324,900.
- Compared to 2021, inventory is up more than five times, the report shows, and the average 30-year fixed rate was 6.7% in March.
Between the lines: Nationally, most who took out new mortgages in recent years have rates above 6%.
- The average rate on the 30-year mortgage hasn't dipped below 6% since 2022, according to Freddie Mac.
Zoom in: States with more mortgage originations over the past three years see more loans with rates at 6% or higher, says Molly Boesel, principal economist at Cotality, formerly known as CoreLogic.
- Many buyers — and homeowners looking to refinance — await any chance to lower their monthly payments.
What's next: Mortgage rates aren't expected to fall much this year and home prices continue to rise.
- The Federal Reserve kept rates flat at 4.4% at its June meeting, something Fox says signals a steady market, and "the market doesn't like uncertainty."
- "I think there's still a very competitive market," she said.