Is Now The Best Time To Sell Your Home?
As mortgage rates continue to rise, many homeowners are starting to realize that their time to sell may be running out. Due to higher mortgage interest rates and higher payments on homes and other expenses like food and gas, it’s not uncommon for homebuyers to find themselves priced out of the market. Although home prices have gone up across most markets these days, sellers begin to fear that most buyers will start waiting until prices drop again before buying.
As more sellers turn to financial advisers and real estate agents for advice on how best to navigate the market, there seems to be an increased urgency in selling. Sellers are now aware that waiting too long may hurt their bottom line and they may have fewer buyers interested than before.
Higher interest rates are supposed to cool the housing market, but demand has been resilient, and there’s a low inventory of homes on the market. Sellers may want to act quickly given recent concerns over prices being unhinged from fundamentals- as noted by The Federal Reserve Bank Dallas, “there is growing concern that US house prices are again becoming divorced from reality.”
When is it the right time to sell?
Homes are currently selling over the asking price and at breakneck speeds, but prospective home sellers should always take stock of the local real estate market and their financial situation before deciding on an accelerated plan to sell.
The housing market may already be showing signs that it’s leveling off; some economists say; that recognizing these trends could provide valuable information about when it is best to put your house up for sale in order to receive top dollar while still being able to buy another property later down the line.
As inflation is rising and consumers become more pessimistic, new homebuyers now have to search for homes in a lower price range. According to Freddie Mac, the average interest rate for 30-year fixed mortgages was 5.27% last week, which is up 72% percent from just the end of December of 2021. The drastic spike in interest rates could mean some potential homebuyers will no longer qualify or even want to buy in an area where prices have been rising rapidly because they may be officially priced out of the market or lack affordability in certain areas.
Home prices continue to rise, mortgage rates are higher than they’ve been in years, and there is minimal inventory on the market. This combination has resulted in applications for purchase mortgages the week of April 22nd, compared with last year’s numbers, to fall by 7.6%. Mortgage applications have been falling for seven straight weeks as mortgage rates continue to inch higher.
This is a concerning trend as it suggests that fewer people are able to afford homes at current mortgage rates. Mortgage rates have been rising steadily since the beginning of the year and are now at their highest levels since 2010. This is likely to continue to put pressure on the housing market in the coming months.
As sellers prepare for what could turn into a potential buyer’s market, they should understand the psychology of buying and selling. According to Nick Marensoski, an economist from Miami, FL, buyers will have less money to spend on houses as mortgage rates rise.
Since December 2021, rising mortgage rates have significantly impacted homebuyers across the country. With the drop in buying power, many potential homebuyers have been hit hard by these rate changes. For example, consider the case of a buyer who was approved for a maximum loan of $500,000. Prior to December 2021, this individual was able to afford a house in their price range. However, since that time, they have seen their purchasing power drop dramatically. Today, they are only approved for a maximum loan of $420,000, significantly limiting their options when it comes to buying a home.
The housing market is anticipated to be stable in the short term, but sellers should remain cautious. The Federal Reserve announced more rate hikes this year which has caused many sellers’ spirits to rise. Sellers are feeling antsy about their properties being priced too high or if prices will eventually drop due to their own accord like what happened during the 2008 financial crisis when people started selling because of fear before actually knowing there was an economic problem at hand (the Invisible Hand).
If you are thinking of selling your home, it’s important to remember that when it comes to the housing market, there is no clear way to predict what will happen next. The best we can do is look for signs like rising interest rates, a drop in purchase applications, and low housing inventory, and analyze the available data to make our best guess about what might be coming next. Some worry that these alarming trends may be indicators of another housing crash, while others believe that they could simply be a natural adjustment to the current state of the economy and inflation. Regardless of which view is correct, one thing is certain: the housing market remains a constantly shifting landscape that can be difficult to navigate. Nonetheless, by keeping a close watch on key economic indicators and studying available housing data, homeowners, savvy investors and real estate professionals alike can gain valuable insights into what the future may hold for this crucial sector of the economy.
Right now may be a good time to sell, depending on your location, but it’s also essential to consult with a local real estate agent who can give you an accurate housing market report for your area. Selling a home is a big decision, and taking the time to get all of the facts will help ensure that you make the best possible choice for yourself and your family.