According to Bank of America's (BAC) 2023 Homebuyer Insight report, the percentage of prospective homebuyers waiting for prices and/or interest rates to drop has fallen from 85% down to 62%. The U.S. housing market has been in a tough spot as contract signings for existing homes fell to one of their lowest rates in 20 years in October. Matt Vernon, Bank of America Head Of Consumer Lending, joins Yahoo Finance to give insight to the numbers in the report and what it could mean for the U.S. housing market, particularly with rates remaining at relatively high levels.

The report is "Clearly illustrating that the consumer today that is in the home buying journey at the beginning, in many respects, is beginning to, to your point, lose patience with the rate environment because ultimately that dream of home ownership is alive and well for all the reasons that we've talked about in the past...I think the real important aspect of this though is the existing homebuyers and ultimately the motivation for them to begin to list their homes as well."

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Video Transcript

BRAD SMITH: The housing market has been in a tough time here. But it seems like prospective homebuyers are getting impatient, according to Bank of America's Homebuyer Insights report out today. 62% of them are waiting for rates to fall to buy a home. And that's down from 85% in April.

To break down the numbers, Matt Vernon, Bank of America Head of Consumer Lending, here with us. Matt, great to just grab you for a hot second here. We know that homebuyers are getting impatient. So what are we seeing in terms of the turnover of people that are saying, you know what? I just got to get out there and see what's available, and perhaps put some bids in.

MATT VERNON: Yeah. Hey, I think the stats that you mentioned are eye-opening, because it's clearly illustrating that the consumer today that is in the home buying journey at the beginning, in many respects, is beginning, to your point, lose patience with the rate environment because ultimately, that dream of home ownership is alive and well for all the reasons that we've talked about in the past. So they're beginning to enter into it.

I think the real important aspect of this, though, is that the existing homebuyers. And ultimately, the motivation for them to begin to list their homes as well. And there was some encouraging data in the survey as well there, where homeowners are looking to list their house more specifically than they have in the past. In fact, 50% of homebuyers currently, even with low rates, have said that they would sell their home if the house of their dreams came available, or they could move to a more affordable area.

- Matt, you mentioned the fact-- 50% there saying that they would be, I guess, open to moving if their dream home was available. What are some of those other top reasons, or other motivating factors that you're seeing for people that maybe have been hesitant to list their house to put it up for sale?

MATT VERNON: Yeah, I think the survey has told us a few things in addition to finding that dream home. One, job opportunity or relocation. We saw a preponderance of that. We also saw folks that ultimately wanted to move to more affordable areas, be it within the area that they live or even beginning to move from state to state into the Sun Belt states and other areas to find a more affordable execution. And in some respects, you've got the Baby Boomer population that's beginning to downsize, which ultimately should provide inventory to those first time homebuyers and others.

BRAD SMITH: OK. And at the same time, you still have a lot of the new home builders that are trying to kind of backfill for where there has been under production. What are we seeing on that new home side and financing options there?

MATT VERNON: Yeah. We've seen some of the numbers kind of move around a little bit this year. And in September, we saw single family home starts raise, or be adjusted upwards to $759,000. Up from $679,000 in April.

And then, here recently, we've seen it move a little bit less. That said, there's-- the permit process is very active. So we do expect sales of new single family homes, and ultimately, that development aspect that you're speaking of, to continue to increase as we head into '24.