Is now the best time to sell your home, or buy your next property?
That’s an intensely personal question that depends on a number of factors that each person must ultimately make themselves.
Mortgage rates and inflation are on everyone's mind these past couple years. The number fluctuations are everywhere we look day to day from social media to radio and television. We are all feeling the squeeze from purchasing our groceries, utility costs, fuel, and yes buying and selling real estate.
Does that mean you should put your buying and selling to a halt and wait this phase out... not necessarily. So, does that mean you should go ahead and sell or buy your property... not necessarily.
The best thing anyone can do is get informed so they can make the best decision for themselves and their family.
Interest Rates
In 2006, some sellers might have been wondering if they should have waited another year and netted even more profit … but today we know that those sellers would have kicked themselves for making that decision. Major economic shifts aside, there are plenty of things to consider and questions to ask to make sure you are making the right choice.
Pros to buying now -
- Fewer buyers to compete for properties since some have made the decision to wait and see what rates are going to do.
- If rates continue to go up, you will have locked in before that happens, with the option to refinance later when it makes sense.
We all know what goes up, will eventually come down. I'm not sure we will see interest rates in the 2% range again anytime soon, however that is just my guess. Absolutely no one knows for sure what's going to happen either way. That being said, a positive to mention is our home values have continued to rise which has given homeowners more equity.
Cons to buying now -
- Higher rates than what we had gotten used to seeing just a couple years ago. If you currently have a 2%-3% interest rate and have to sell and/or buy, you will unfortunately need to be ready to give that lower rate up in exchange for what is being offered now.
***There are options to possibly getting your rate lowered. (Consider paying points, ask seller for a temporary buy-down assistance instead of price reduction, ask if assuming the seller's current mortgage and rate are an option, shop lenders rates before committing, improve your credit score, etc.) These are all important ideas to discuss with your loan officer/mortgage originator. Make sure to also let your real estate agent know if you plan to refinance when market allows, so they can try to help you when negotiating your offer. They can work to maximize any seller credits and limit your out-of-pocket costs, so you won't be out a big amount twice especially with that later planned refinance.
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Home Prices
Here again, the fluctuations in housing prices are inevitable. It is certain however, that property numbers have went up from where they were just a few years ago. It's also obvious to see how housing prices have risen faster than wages, hence part of the squeeze some may be feeling with their budgets. Prices will continue to rise and fall during certain months, depending on amount of inventory, and of course economic factors.
Pros to buying now -
- With fewer buyers, some properties are going through price reductions and terms become more negotiable with the sellers.
- If prices continue to rise, by purchasing now, you may be able to get any potential house before it becomes priced out of your affordability range.
Cons to buying now -
- There's a lower amount of inventory in some areas, so finding that next perfect property may take a little longer.
- If buying when housing prices are up, there is always the possibility rates and prices can fall soon after. No one knows day to day!
Timing
This is where it all boils down to what is best for you and your family. I know that may not give you the direct answer you were looking for... but it's the most honest answer I could give someone when they ask me "should I wait", or "should I just go for it". I could never make that decision for someone else in good conscience.
Ask yourself -
- What does our budget look like?
- Do we have to sell... or do we want to sell?
- Do we have to buy... or do we want to buy?
- Are we prepared to refinance later if we buy now?
- Have we found our perfect property or are we settling?
- Do we need to downsize, or is our family growing and we need more room?
- Changing jobs and have to relocate?
- Etc., etc., etc.
All That Being Said...
All people have their different priorities and that is ok. Buying and selling property is a BIG deal. The biggest of one's life usually.
Should folks consider committing to a 6%-7% mortgage rate, when they are ok paying 15%-25% on several credit cards, paying 100% interest with rent, and ok paying $60k-$85k for a truck with 6%-7% rate?
I am not saying any of this to pressure anyone into a real estate transaction they are not ready for! I am actually quicker to plead don't do it if you're unsure!!
I say all this because those "folks" I was talking about... was myself and my own personal financial history.
I did not have the same priorities and financial goals I have today, and I want to share a different perspective for anyone who wants to put their home priority above any other debt. I myself used to pay rent, I myself used to have several car notes and complain about not having the house I wanted. I myself used to have way too many credit cards charged with stuff that wasn't near as important to me as a house note would have been for the same amount. When I really sat down and looked at what I was paying for what... we could have been paying all that money on our "perfect" house note all along. Priorities shifted for us then.
If you and your family need to sell or buy for whatever the reasons are, it makes sense financially, and it feels right to you, don't worry about what anyone else is doing or not doing.
You do what is right for you!
Hi there! I am the Broker & Owner of Country Roots Realty and I love helping buyers or sellers with all of their real estate needs here in the Pineywoods of East Texas.
