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Low demand combined with low inventory have helped stabilize home prices.
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Sky-high mortgage rates have many homeowners wondering whether it’s better to wait to sell their homes.
Because inventory is so tight, those who sell now can still earn a fair profit on their homes.
Do research on your local market and work with an experienced real estate agent to maximize your profits.
US homeowners are in an awkward spot right now. Many purchased or refinanced their homes when mortgage rates hit historic lows in 2020 and 2021, and now that rates have shot up, they can’t buy a new home without taking on a rate that’s more than double what they’re currently paying.
Even though there aren’t many incentives for homeowners to list their homes right now, some still are. But is that wise?
We talked to real estate pros to get their insight on whether now is the time to sell your house. Here’s everything homeowners need to know.
Should I sell my house in 2023?
The one thing we heard over and over from the real estate agents we talked to was that the decision to sell should be made based on your needs, not what the market is doing. But if you have some flexibility in your current situation, you might be wondering how to time things so you get the best deal.
Though the current market is certainly challenging for both buyers and sellers, there’s no guarantee that conditions will improve soon.
“Homeowners should consider selling their properties now rather than waiting for an uncertain future,” says Rachel King, a real estate agent with SERHANT in New York City. “While no one can predict market conditions with absolute certainty, there’s a risk that interest rates may continue to rise, negatively affecting demand and overall property values.”
When selling makes sense
If you’re in a real estate market that still has a decent amount of buyers and you think you’ll be able to find a new house with a monthly payment that fits your budget, it might make sense for you to sell your house right now.
To get a better idea of whether you should sell now, get familiar with your local market. Check out what homes are selling for in your neighborhood, and talk to a real estate agent about how much you could possibly get for your home.
If you’re waiting for mortgage rates to fall before you sell, you’re playing a potentially risky game.
“Once demand increases due to lowered rates, prices will undoubtedly rise quickly which ends up washing out any rate savings due to paying premium prices,” says Alec Cantley, a real estate agent with Premier Sotheby’s International Realty in Asheville, North Carolina.
When waiting makes sense
There are some circumstances where you might be better off waiting to sell your home.
If you purchased or refinanced fairly recently, selling too early can be expensive, especially if you haven’t built up much equity in the home yet. You should also avoid selling if you’re underwater on your mortgage, which happens when you owe more than what your home is worth.
Consider your local market conditions as well. If homes like yours are sitting on the market for months or there’s no available homes in your price range, you might be forced to wait it out.
Pros of selling your house now
The market is calmer right now
The housing market is in a weird place at the moment because demand is low, but so is inventory. This means that buyers don’t have to deal with as much competition pushing prices up, but because there are so few houses available, prices are also not falling.
This could give you a small advantage as both a seller and a buyer. Because there’s so little inventory, you’ll likely still be able to get a fair price for your home. And with so few buyers on the market, you won’t have to worry about having to offer over asking price to compete for homes.
Lenders are offering money-saving deals
“Lenders have gotten creative with options to buy down interest rates or offer rate repricing in the future,” Cantley says. “Buyers can take advantage of those buydowns by negotiating points or seller credits into an offer to get a manageable rate now and then refinance in the future when rates pull back.”
Be on the lookout for lender deals that can ease the burden of sky high rates, like buy now refinance later mortgages.
Cons of selling your house now
We’re currently in one of the most expensive markets
In spite of these silver linings, the fact is that we’re in a really tough market. Home prices are still high, mortgage rates have topped 7% and continue to head higher, and both supply and demand have fallen dramatically.
Values have fallen in some areas
“In quite a few markets, selling now may mean receiving a reduced price for your home,” says Mary Hall Mayer, real estate agent with Coldwell Banker Warburg in New York City.
On the other hand, Mayer says, lower prices mean you’ll also pay less for your new home.
Whether selling now could be advantageous or not ultimately depends a lot on your local market. If you’re considering selling, set up some time to talk with a few real estate agents about what the market is like in your area and what challenges you’ll likely encounter.
Don’t try to time the market
It might seem like a smart strategy to wait for mortgage rates to drop before listing your home. The problem is that no one really knows for sure if and when rates will come down.
Experts have been forecasting that mortgage rates will drop soon for months now, and while rates should come down eventually, the timeline of when they’ll start falling keeps getting pushed back. At the start of the year, Fannie Mae predicted that average 30-year mortgage rates would drop to 6.1% by the end of 2023. Now, it believes that rates will only inch down to 6.7% by the end of the year, and that rates will stay in the 6% to 6.5% range throughout 2024.
If you’re waiting for rates to fall, you could be waiting a long time. It’s better to make your decision based on your own needs and wants.
“Gauge what is going on in your market, but move on!” Mayer advises. “Life is short, so live the life you really want.”
Should I sell now frequently asked questions
Should I sell my house now or wait until 2024?
If you wait until 2024 to sell your house, it’s possible that mortgage rates will be lower. But lower rates would likely push up home prices, making it more expensive for you to buy a new home.
Should I sell my house now before a recession?
It’s possible we’ll experience a recession within the next year or so. Because home values often fall during recessions, it might be a good idea to sell before one rather than during or after it. However, values might not drop significantly in the next recession due to how tight the supply of homes already is.
How do you decide if you should keep or sell your house?
Selling or keeping your house is ultimately a personal decision. If you’re interested in selling but are worried about market conditions, it’s best to talk with a real estate agent about your options and potential challenges you might encounter.
Should you sell house when the market is high?
It’s definitely better to sell your home when the market is high vs. when it’s experiencing a dip, but it’s not always easy to time your sale like that. Home prices have generally been increasing over the past few years, which means you could earn a decent profit from your home sale.