“Two things are holding homeowners back from selling. Let’s take a look.”
Many homeowners thinking about selling have two key things holding them back. That’s feeling locked in by today’s higher mortgage rates and worrying they won’t be able to find something to buy while supply is so low. Let’s dive into each challenge and give you some helpful advice on how to overcome these obstacles.
Challenge #1: The Reluctance to Take on a Higher Mortgage Rate
According to the Federal Housing Finance Agency (FHFA), the average interest rate for current homeowners with mortgages is less than 4% (see graph below):
But today, the typical 30-year fixed mortgage rate offered to buyers is closer to 7%. As a result, many homeowners are opting to stay put instead of moving to another home with a higher borrowing cost. This is a situation known as the mortgage rate lock-in effect.
The Advice: Waiting May Not Pay Off
While experts project mortgage rates will gradually fall this year as inflation cools, that doesn’t necessarily mean you should wait to sell. Mortgage rates are notoriously hard to predict. And, right now home prices are back on the rise. If you move now, you’ll at least beat rising home prices when you buy your next home. And, if experts are right and rates fall, you can always refinance later if that happens.
Challenge #2: The Fear of Not Finding Something to Buy
When so many homeowners are reluctant to take on a higher rate, fewer homes are going to come onto the market. That’s going to keep inventory low. As Lawrence Yun, Chief Economist at the National Association of Realtors (NAR), explains:
“Inventory will remain tight in the coming months and even for the next couple of years. Some homeowners are unwilling to trade up or trade down after locking in historically-low mortgage rates in recent years.”
Even though you know this limited housing supply helps your house stand out to eager buyers, it may also make you feel hesitant to sell because you don’t want to struggle to find something to purchase.
The Advice: Broaden Your Search
If fear you won’t be able to find your next home is the primary thing holding you back, remember to consider all your options. Looking at all housing types including condos, townhouses, and even newly built homes can help give you more to choose from. Plus, if you’re able to work fully remote or hybrid, you may be able to consider areas you hadn’t previously searched. If you can look further from your place of work, you may have more affordable options.
Bottom Line
Instead of focusing on the challenges, focus on what you can control. Let’s connect so you’re working with a professional who has the experience to navigate these waters and find the perfect home for you.
To view original article, visit Keeping Current Matters.
Prioritizing Your Wants and Needs as a Homebuyer in Today’s Market
It’s important to be mindful of what’s a necessity and what’s a nice-to-have when searching for a home.
3 Ways You Can Use Your Home Equity
A real estate professional is the best resource to help you understand how much home equity you have and advise you on some of the ways you can use it.
Your House Could Be the #1 Item on a Homebuyer’s List During the Holidays
Each year, homeowners planning to make a move are faced with a decision: sell their house during the holidays or wait.
What Homeowners Want To Know About Selling in Today’s Market
The key to success today is being realistic and working with a trusted real estate advisor.
Mortgage Rates Will Come Down, It’s Just a Matter of Time
As we get through the inflation battle and start to see that coming down, we should expect mortgage rates to follow.
More People Are Finding the Benefits of Multigenerational Households Today
Combining resources with parents and/or siblings may help you achieve the dream of buying and owning a home.