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Originally Published: Feb 16, 2023
Originally Published: Feb 16, 2023 Last Updated: Feb 16, 2023 10 min read
Photo collage of a house with a for sale sign in-front
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The housing market is coming out of its slumber, at least a little. But plenty of would-be buyers who can afford a home are still opting to hit the snooze button on buying – or skipping the idea for good.

Pending home sales, a forward-looking sales indicator, ticked up by 3% in January and is 28% higher than back in November, according to the brokerage Redfin. The uptick followed a series of interest rate cuts in late 2022 and early 2023.

With rates now hovering around the low 6%s, the population of would-be homebuyers has widened. About 15 million potential buyers can currently afford a mortgage of $400,000 — the median home price in the U.S. — according to recent research conducted by Freddie Mac. That’s about 3 million more than could afford such a mortgage just three months ago, when rates topped 7%.

Obviously, some of those people are snapping up homes, including those who need to buy or sell a home because of life changes, says Angelica Olmsted, a realtor with RE/MAX Professionals in Denver, Colorado. But many others who should be motivated by lower rates to shop for a new home aren’t doing so, she adds.

A lot of “[p]eople in the ‘want’ [to buy] category..are taking their time,” Olmsted observes.

Here’s a look at some reasons for that hesitancy. If you, too, are on the fence about a home purchase this year, these factors might be useful as you wrestle with whether to be in or out of the market.

Rates are lower, but still not low

Rates have dropped lately, but they remain well above the levels that helped superheat the housing market in 2021 and early 2022. And that’s created an affordability gap compared with those go-go days.

The loss of buying power over the past year is significant. A buyer who qualifies for a $400,000 loan at today’s 6%-or-so rates would have been able to buy a $516,000 home back when rates were hovering around 3% at the end of 2021.