Are You a Homeowner Thinking About Selling?

Are You a Homeowner Thinking About Selling?Are you a homeowner thinking about selling, but feeling held back by the current market conditions? You're not alone. Many are facing two key challenges: feeling locked in by today's higher mortgage rates and worrying about finding a new home in the low-supply market. Let's take a closer look at each challenge and explore 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%. However, today's typical 30-year fixed mortgage rate offered to buyers is closer to 7%. This significant increase has led many homeowners to hesitate moving to another home with a higher borrowing cost, a phenomenon known as the mortgage rate lock-in effect.

The Advice:

Waiting May Not Be Your Best Option While experts predict that mortgage rates will gradually fall this year as inflation cools, waiting may not pay off. Mortgage rates are notoriously difficult to predict. Moreover, home prices are currently on the rise. By making a move now, you could potentially avoid higher home prices when purchasing your next home. Additionally, if rates do fall as predicted, you can always refinance later.

Challenge #2: The Fear of Not Finding Something to Buy

With fewer homeowners willing to take on a higher rate, the number of homes coming onto the market is decreasing, keeping 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."

The Advice:

Broaden Your Search If the fear of not finding your next home is holding you back, consider expanding your search. Explore all housing types, including condos, townhouses, and newly built homes, to increase your options. Additionally, if you have the flexibility to work remotely or in a hybrid model, you may be able to consider areas you hadn't previously thought of. Looking further from your place of work could open up more affordable options.

Bottom Line

Instead of focusing on the challenges, focus on what you can control. Reach out to a local real estate agent who can help you navigate these market conditions and find the perfect home for you. Their experience and expertise can make all the difference in overcoming these obstacles and achieving your real estate goals.

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