Overcoming Hesitations as a Seller in Today's Market

Many homeowners thinking about selling may have concerns holding them back. Two primary factors are the current higher mortgage rates and the fear of not finding a suitable property amidst the low housing supply. Let's address these challenges and provide valuable advice to overcome them.

Challenge #1: Reluctance to Take on Higher Mortgage Rates

According to the Federal Housing Finance Agency (FHFA), the average interest rate for current homeowners with mortgages is less than 4% (see graph below). However, today's typical 30-year fixed mortgage rate for buyers is closer to 7%, leading many homeowners to hesitate moving to a new home due to higher borrowing costs. This situation is commonly known as the mortgage rate lock-in effect.

Our Advice: Timing is Key

While experts project that mortgage rates may gradually fall as inflation cools, waiting may not be the best option. Mortgage rates are challenging to predict accurately, and meanwhile, home prices are on the rise. Selling now could mean avoiding higher home prices when purchasing your next property. If experts are right and rates do fall, you can always consider refinancing later if the opportunity arises.

Challenge #2: Fear of Not Finding the Right Property

With many homeowners reluctant to take on higher rates, the number of homes available on the market decreases, resulting in low inventory. Lawrence Yun, Chief Economist at the National Association of Realtors (NAR), explains that inventory will remain tight in the coming months and even the next couple of years. This limited housing supply may make you hesitant to sell, fearing that you won't find a suitable property to purchase.

Our Advice: Expand Your Search

If the fear of not finding your next dream home is holding you back, consider exploring all your options. Look at various housing types, including condos, townhouses, and newly built homes. Additionally, if your work situation allows it, consider areas you hadn't previously searched. Being more flexible with your location can open up more affordable options and increase your chances of finding the right property.

Instead of dwelling on the challenges, focus on what you can control. Reach out to a local agent with the expertise to navigate these waters and find the perfect home for you. Taking proactive steps and being open to various possibilities can help you overcome hesitations and make the most of today's real estate market.