Whether it’s from first-hand experience, from a friend, or on the news, we’ve all heard the stories – a potential buyer puts in an offer on a house, only to be out-bid by thousands of dollars in a matter of minutes. Pair that hyper-competitive market with rising interest rates, soaring home prices, and dwindling inventory, and house hunting can quickly feel like an unfair game of cat and mouse.
But the housing market isn’t all bad news (for current homeowners, at least!). While it may not be the most opportune time to buy, it’s certainly a good time to sell – so should you?
Before staking in the “for sale” sign, keep reading as the House Hacks Tips team helps you navigate the pros and cons to determine if taking advantage of today’s “sellers market” is in your best interest.
It’s a Good Time to Sell…
It’s no secret that home prices are climbing, which means sellers are reaping the rewards in the form of selling for over-asking prices – about 6% more, to be exact.
But, thanks to the pandemic housing boom, the 2021 mortgage rates we saw fall to historic lows have bounced back. And, thanks to record inflation sweeping the nation, the average 30-year mortgage rate recently soared past 6%, a steep bump that has given some homebuyers pause, and sellers an indication that demand may be slowing down.
However, despite record highs, real estate experts anticipate interest rates to start to flatline, and even decrease a percentage point or two in the later half of the year. This will be an enticing way to draw potential buyers back to the market after their hiatus, and promising news for homeowners getting ready to put their home on the market.
…So Should You?
Flatlining rates, and a hopeful outlook for depreciating prices, will keep demand up for sellers, but earning above-top-dollar for your home like we’re seeing in today’s market may not be the reality for too long.
As housing prices have soared to amounts we’ve never seen before, the number of homes sold during the first half of 2022 has declined year-over-year – and experts expect this trajectory to continue. This has industry experts hopeful that we can expect a dip in home costs, which is a future any potential homebuyer can look forward to.
This process is what the pros refer to as the market “correcting itself” after a period of pushing affordability beyond realistic terms for the average homebuyer. As such, the market “corrects” through dips in home prices as the federal government matches the correction with lowered interest rates. In other words, if you want to take advantage of a potentially higher market price, now may be the time.
However, keep in mind that when you sell a home, you’ll then also be put in the same shoes as other homebuyers. This means that once you do find a new spot you’d like to live, while having to endure bidding wars in a competitive market, you could potentially shell out hundreds of thousands of dollars over asking price, while locking in a historically high interest rate. If a quick Zillow search for a home within your budget returns slim results, it may be wise to hold off on selling until the market cools down.
But, if you’re in a good position to buy, and are a “strike when the iron is hot” type, the iron is hot – so strike!
