The current state of mortgage rates is undeniably influencing the housing market, and it’s understandable if you have questions about whether now is the right time to sell your home.
To help clarify things, here are three common questions many homeowners are asking, along with the data that can help guide your decision:
1. Should I Wait to Sell?
If you’re considering waiting for mortgage rates to drop before selling your home, here’s something to keep in mind: you’re not alone. Many others are also waiting for the market to shift.
Although mortgage rates are expected to decrease later this year, waiting for that to happen might bring a surge of competition. As more buyers and sellers enter the market, the increased demand could lead to higher prices and more multiple-offer situations. According to Bright MLS:
“Even a modest drop in rates will bring both more buyers and more sellers into the market.”
So, while waiting might sound tempting, you could face tougher competition when purchasing your next home, which could drive prices up faster.
2. Are Buyers Still Active?
Even with current conditions, there are still buyers actively searching for homes. The latest data from the ShowingTime Showing Index reveals that while demand has dipped slightly from the peak “unicorn years” (shown in pink), it’s still strong compared to the more typical years (2018-2019).
When you focus on the blue bars representing activity from the last regular years, it becomes clear that demand remains relatively high compared to pre-pandemic times. So yes, there are still plenty of buyers out there looking for a home—your home could be exactly what they’re searching for.
3. Can I Afford to Buy My Next Home?
Concerns about affording your next home, especially with current interest rates and home prices, are valid. However, you might have more equity in your current home than you think, which could provide a significant advantage in your next purchase.
Homeowners have accumulated substantial equity over the past few years, and that equity can be a game-changer when buying your next home. In fact, some homeowners may have enough equity to purchase their next property in cash, bypassing the need for a mortgage entirely. Jessica Lautz, Deputy Chief Economist at the National Association of Realtors (NAR), shared that:
“…those who have built housing equity through home price appreciation are the current winners in today’s real estate market. One-third of recent home buyers did not need financing last month—the highest share in a decade. For these buyers, interest rates are less of a concern.”
If you’ve been contemplating selling your home but are hesitant due to these questions, hopefully this information helps clear things up. A recent study from Realtor.com showed that more than 85% of potential sellers have been considering listing their homes for over a year. If you’re one of those on the fence, you’re not alone.
But here’s something important to note: among the sellers who recently took the leap and listed their homes, 79% expressed that they wish they had sold sooner. So, if you’ve been waiting, now might be the time to make your move.