There's no denying that mortgage interest rates are having a major impact on today's housing market, which may leave some of you wondering if it still makes sense to sell your home and move.
Here are three common questions you might ask and some data to help answer them.
1. Should I wait to sell?
If you're thinking about waiting to sell until mortgage rates drop, as many others are, here's what you need to know.
Mortgage rates are expected to fall later this year, but waiting until that happens could mean more competition as other buyers and sellers re-enter the market. Bright MLS says:
“Even a slight decrease in interest rates will bring more buyers and sellers into the market.”
That means if you wait, you'll have to deal with issues like accelerated price increases and multiple bidders the next time you buy a home.
2. Are there any buyers yet?
But that doesn't mean no one is making moves right now. While some are holding back on buying, there are plenty of people still actively buying. And here's the data to prove it.
ShowingTime's Viewing Index is a measure of how often buyers are touring homes. The chart below uses this index to show buyer activity in March (the most recent data available) over the past seven years.
As you can see, demand has declined slightly since the “unicorn” era (shown in pink). This is due to a number of market factors, including higher mortgage rates, rising prices, and limited inventory. However, to truly understand demand today, we need to compare the current situation to the last year (2018-2019) when the market was normal, rather than the abnormal “unicorn” era.
If we focus only on the blue bars, we can see what the situation will be like in 2024. And it gives us a whole new perspective.
Nationwide, demand in the housing market remains high compared to the past few average years (2018-2019), meaning there is still a market for your home to sell.
3. Can you afford to buy your next home?
And if you're worried about how much your next move will cost with current interest rates and prices, consider this: You probably have more equity in your current home than you realize.
Homeowners have gained record amounts of equity over the past few years. And that equity can make a big difference when it comes to buying your next home. You may have enough equity to buy all cash and avoid needing a mortgage, says Jessica Lautz, deputy chief economist at the National Association of Realtors (NAR).
“…the winners in today's housing market are those who have gained equity in their homes due to rising home prices. Last month, one-third of recent homebuyers did not finance their home purchase, the highest percentage in the past decade. For these buyers, interest rates may have less of an impact on their purchasing decision.”
Conclusion
If these three questions are on your mind and holding you back from selling, it’s good to know this information now: According to a recent survey from Realtor.com, over 85% of potential sellers have been considering selling for more than a year, meaning there are plenty of sellers out there just like you who are undecided.
However, the same survey also interviewed sellers who had recently decided to take the plunge and sell, and 79% of sellers who recently sold regretted not selling sooner.
If you would like to discuss these questions further or require any further information, please get in touch.
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