The housing market will be different in the last few months of 2022 than it was at the beginning of the year. In order to fight inflation, the Federal Reserve has raised interest rates several times this year. This is one of the reasons why the average 30-year fixed-rate mortgage interest rate hit a 14-year high of 6.29 percent on September 22. With interest rates making monthly mortgage payments more expensive, many buyers are taking a step back to see if they can still afford to buy a new home.
Still, home prices keep going up in most parts of the U.S. from one year to the next, so it might not be a bad idea to sell your home if you want to focus on other things.
If you’re not sure whether or not to sell, you can do a few things. You can put your house on the market to take advantage of the low supply (even though demand is low), you can wait to see how interest rates and inflation affect housing, or you can choose to stay in your current home for the foreseeable future.
Here are three reasons why you shouldn’t sell your house before the end of 2022 and three reasons why you should sell it now:
You just bought a home or got a new loan for it.
If you’ve moved or refinanced in the last few years, there’s no reason to think about selling your home soon. Your mortgage should have helped you deal with any money problems you might have had.
Before 2022, a lot of homeowners were able to lock in mortgage rates below 3%. This makes it less likely to sell in the near future. If you don’t have to move because of something else, enjoy the low-interest rate you’ve locked in and keep putting money into your home.
If you’re happy with your current mortgage, you might want to keep it for a while, since mortgage interest rates aren’t likely to go down much in the next few months.
Odeta Kushi, the deputy chief economist for First American Financial Corp., which provides title insurance and risk solutions for real estate transactions, said in an email that the housing market is very sensitive to changes in interest rates and has cooled a lot because of rising mortgage rates and falling affordability. The Fed knows that the housing market is slowing down and that it has a big impact on the economy as a whole.
But this probably won’t be enough to stop the Fed from making money even tighter. We’re not out of the woods yet when it comes to inflation. The Fed will keep raising the federal funds rate until there are clear signs that inflation is going down. ”
You worry that you won’t be able to buy what you want next if you don’t sell soon.
In the past few years, people have worried about being able to afford their next home purchase because home prices are going up quickly and there aren’t enough new homes for sale. With interest rates over 6%, it doesn’t look like buying a new home will save you much money. Don’t be afraid to wait if you don’t think now is the right time to sell your home.
Should I sell my house now or wait until 2022?
Kushi says that people who are thinking of selling their homes should ask themselves if they are ready to move and if they will be able to find another home in their price range. Many U.S. markets are still good for sellers, but they are not as competitive as they were in 2021 and early 2022. ” “Sellers may need to change their price expectations to match the current market.”
If you wait to sell, you’re afraid you won’t be able to find your next home.
The market is more balanced now than it was at the beginning of the year, but there are still not many homes for sale. Houses stay on the market a little longer than they used to because people aren’t buying as quickly as they used to.
It’s easier to buy a new home now than it was in 2021 because there are fewer likely to be multiple offers and bids that are much higher than the asking price. But Redfin says that more than 18% fewer homes were sold in August 2022 than in August 2021, and that’s not just because there weren’t as many buyers. With fewer homes on the market, it might be hard to find the right number of bedrooms, perfect location, or overall feel that will make you willing to pay a higher interest rate.
If you plan to sell in 2022, you don’t have to worry about a high-interest rate.
As 2022 comes to an end, mortgage interest rates are much higher than they were not too long ago. Because of that, many people decide to stay in their current homes. Some people don’t care as much about the interest rate as they used to.
Nobu Hata, CEO of the Denver Metro Association of Realtors, says, “If you compare apples to apples, sellers will get a higher interest rate, but they’ve also built up a lot of equity in the last few years.” When you sell your home, if you have more equity, you can put down a bigger down payment, which lowers your monthly mortgage payment.
Hata says that people who want to buy a new home should talk to more lenders than they did before because interest rates are higher now. “There are mortgage companies out there that will let you lock in an interest rate for a longer period of time.” Some mortgage companies will let you relock if interest rates go down,” he says.
Both Hata and Kushi say that you can’t time the mortgage market perfectly and be sure to get what you want. If you want to sell your house and buy a new one, you should think about your finances and how much risk you’re willing to take based on how the market is right now.
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