Reasons to sell your home now
When analyzing a real estate market, what should inspire you to put your house up for sale? Here are the key factors that can help you determine if it’s time to sell.
If it’s a seller’s market
It’s always best to put your home up for sale on a seller’s market. In this type of market, the demand for homes is greater than the number of homes for sale. Sellers are likely to sell their homes for more money in such a market.
In the summer of 2022, most of the United States remained in a seller’s market. This is partly because many cities have a low inventory of homes for sale. This increases competition among buyers, who are often desperate to find the perfect home.
When there are more buyers than houses for sale, sellers receive cash offers from buyers. These deals are attractive because sellers don’t have to worry that their buyers won’t qualify for a mortgage. Sellers can also find their homes in the midst of bidding wars in which multiple buyers are bidding. This could result in a higher selling price.
Ralph DiBugnara, senior vice president of Cardinal Financial, a mortgage lender based in Edgewater, New Jersey, said that lack of inventory was only exacerbated during the COVID-19 pandemic when many homeowners fled the cities and apartments looking for more living space. Lower interest rates have also encouraged many tenants to become homeowners.
“The supply of homes for sale could take years to reach normal levels,” DiBugnara said. “Even if there is a clearance sale, it won’t be a discount sale. Home prices could go down, but not drastically like in 2007 and 2008.”
If interest rates are low
There has been a lot of news lately about mortgage interest rates. In June, the Federal Reserve Board raised its benchmark interest rate. There is no direct correlation between this rate and mortgage interest rates, but historically mortgage rates have tended to rise when the Fed makes such a move.
This year was no exception. Mortgage interest rates rose steadily throughout the spring and summer, with Freddie Mac saying the average interest rate on a 30-year fixed-rate mortgage was 5.51% as of July 14. This is higher than the 3% interest rates of many borrowers. were getting 30-year loans, but that’s still historically low. For example, on July 13, 1990, the average interest rate on a 30-year fixed rate loan was 10.11%.
What does the current interest rate environment mean for homeowners? As mortgage interest rates have risen, some buyers may exit the housing market and choose to rent instead. No one knows how much mortgage interest rates might rise.
Given this, it still makes sense to sell your home now. Rates could rise next month, or not. But they’re still low enough that mortgage debt remains one of the most affordable forms of debt consumers can take on.
If your current home needs renovations
Is the current kitchen in your home very outdated? Is your garage too small for today’s cars? Do you desperately need another bathroom? If so, it might make more sense to sell your home and buy a new property than to spend the money on expensive renovations.
This is especially true in a seller’s market. Buyers who are dealing with a small number of homes for sale are more likely to overlook needed upgrades if it means entering their preferred neighborhoods.
And if you’re selling, you won’t have to put up with the stress of going through a major home renovation. Instead, you can buy a house that already has all the amenities you need.
If your current home does not meet your needs
Your family is growing? Do you work from home and need more space for an office? Want to move to a more walkable neighborhood? If your current home doesn’t meet your needs, it’s always a good time to move.
This is especially true when it comes to the need for the right size. This is when you need to move into a bigger or smaller house, depending on the size of your family. It’s no fun living in a cramped house when you have three children. Living in a larger home can be a challenge if you’re empty-nesters and no longer want to take on the yard work and upkeep that comes with a larger property. In these cases, moving to a more suitable home is the wise choice.