Many homeowners are hesitant to sell their homes right now, even if they want to move. It’s a strange housing market out there, and it’s hard to know how to best time your sale—and your next purchase. If you’re in this situation, we’d love to help. We thoroughly understand the particulars of this market, and we can provide guidance on how to navigate it.
Let’s look at two major concerns for selling a home right now, along with their potential solutions.
Concern: If I sell my house now, my new mortgage rate will be higher.
The Federal Housing Finance Agency’s (FHFA) National Mortgage Database tells us that the average interest rate for current homeowners with mortgages is less than 4% (see graph below):
Today, the average 30-year fixed mortgage rate is above 7%. Understandably, homeowners are reluctant to exchange their existing mortgage for one that is 3 or so points higher, even if their current home is too small, too far from a new job, or just no longer meeting their needs. This is known as the mortgage rate lock-in effect.
Here’s the thing, though—the best time to sell is when you need to sell, regardless of rates! Luckily, there are steps you can take to lower the effects of a higher interest rate when buying a new home.
Solution: Use your equity to counteract your new, higher rate.
Equity is at record highs. If you’ve been in your current home for several years, you likely have significant equity, even if your house is distressed. You can use that equity to reduce the effects of a higher mortgage rate by putting a larger downpayment on your new home. The smaller your mortgage is, the less interest rate matters.
If you wait to purchase, it’s possible that your next home may come with a lower rate (compared to today’s rates) but a higher purchase price. A higher mortgage rate can be refinanced once rates fall, but a higher purchase price sticks with you!
Concern: If I sell my house now, I might not find the right house to buy.
With inventory low, this is also an understandable concern! Experts predict that inventory will likely stay low for the foreseeable future. “Inventory is approximately 46% below the historical average dating back to 1999,” explains Jack Macdowell, Cofounder and Chief Investment Officer at Palisades Group. “We think that it is highly unlikely that the inventory problem will be resolved in 2023.”
Solution: Reconsider your search parameters.
Are there any options you haven’t considered that might actually be a good fit for your family? Maybe you’ve been searching for a single family detached home when a condo or townhouse might also work. Maybe you’re looking only at existing homes but a new build could be just the ticket. Maybe you wanted to be in the city limits but could handle being a little outside of town. If you can adjust your search parameters in any way, you may be pleasantly surprised at what pops up!
If you’re asking, “I want to sell my house, but is now the right time?” you should feel confident that there are ways to come out ahead in this market.
When you work with MarketPro, we’ll give you the cash you need to put a downpayment on your new home, even if your current home is distressed. We can also time the sale of your current home around the purchase of your new home! No more worrying about being stuck with two mortgages or needing to find a temporary place to live between your sale and your purchase.
Work with MarketPro:
We’ll give you a fast cash offer for your current home just as it is now; no repairs, no upgrades, no inspection, no commissions or fees. You can even choose your exact closing date. Our team will walk you through your quote, including a review of what your home would likely bring on the open market.
If you’re in Washington, D.C., Maryland, Virginia, Pennsylvania or Florida, we’d love to show you how easy and stress-free the sales process can be. Contact us today for a same-day, no-pressure quote.