It’s clear that mortgage rates are significantly influencing today’s housing market. This might leave you wondering if selling your house and relocating still makes sense. Here are three key questions you may be considering, along with data to help answer them.
1. Should I Wait To Sell?
If you’re considering waiting to sell until mortgage rates decrease, here’s what you need to know: many others are thinking the same thing. While mortgage rates are expected to drop later this year, waiting could mean facing increased competition from other buyers and sellers re-entering the market.
According to Bright MLS, “Even a modest drop in rates will bring both more buyers and more sellers into the market.” This means waiting could lead to faster-rising prices and more multiple-offer situations when you purchase your next home.
2. Are Buyers Still Out There?
However, this doesn’t mean that no one is moving at the moment. While some are holding off, there are still many active buyers today. The data backs this up. The ShowingTime Showing Index, which measures how frequently buyers are touring homes, provides insight into current buyer activity. The graph below illustrates this index for March (the latest data available) over the past seven years:
You can see that demand has decreased somewhat since the ‘unicorn’ years (highlighted in pink) due to various market factors like higher mortgage rates, rising prices, and limited inventory. To truly understand current demand, it’s essential to compare today’s market to the last normal years (2018-2019) rather than the unusual ‘unicorn’ years. By focusing on the blue bars, you can see how 2024 compares.
This new perspective shows that, nationally, demand remains high compared to the last normal years in the housing market (2018-2019). Therefore, there’s still a strong market for selling your house.
3. Can I Afford To Buy My Next Home?
If you’re concerned about being able to afford your next home given today’s rates and prices, consider this: you likely have more equity in your current home than you realize. Homeowners have accumulated record amounts of equity in recent years, which can significantly impact your ability to purchase your next home. You might even have enough to make an all-cash purchase, eliminating the need for a mortgage entirely.
As Jessica Lautz, Deputy Chief Economist at the National Association of Realtors (NAR), explains, “. . . those who have earned housing equity through home price appreciation are the current winners in today’s housing market. One-third of recent home buyers did not finance their home purchase last month—the highest share in a decade. For these buyers, interest rates may be less influential in their purchase decisions.”
Bottom Line
If these three questions have been preventing you from selling, I hope this information is beneficial. According to a recent Realtor.com survey, over 85% of potential sellers have been contemplating selling for more than a year, indicating that many sellers, like yourself, are still undecided. However, the survey also showed that 79% of recent sellers regret not having sold sooner.
If you’d like to delve deeper into any of these questions or require more information, feel free to reach out.
