Is It a Good Time to Sell a House?
Is 2023 a good time to sell a home? Given the dramatic rise in mortgage rates over the past year, this is a question on the minds of many sellers who are considering selling their homes. The housing market has been heavily impacted by the rise in mortgage rates, causing many consumers to question whether now is a good time to sell their homes.
The Fannie Mae Home Purchase Sentiment Index® (HPSI) recently reported that only 17% of respondents believe it’s a good time to buy a home due to the ongoing affordability challenges posed by elevated mortgage rates and home prices. However, the percentage of those who say it is a good time to sell increased from 51% to 59% in January, and the net share of those who say it is a good time to sell increased by 11 percentage points.
The Federal Reserve's actions to curb inflation last year, including four historic rate hikes, have led to a rise in fixed mortgage rates, putting a strain on the housing market. In December and February, the Fed dialed down the pace of interest rate hikes, but they may continue to increase in the future. While economists are divided on the future of the U.S. economy in 2023, it is likely that mortgage rates will continue to rise.
The majority of consumers expect home prices to either decrease or remain flat over the next year, but there is a slight increase in those who believe home prices will go up in the next 12 months, increasing from 30% to 32%. The percentage of those who expect mortgage rates to go up also increased from 51% to 52%.
For borrowers, it is not advisable to try to time the market with mortgage rates as it can be unpredictable. The best advice is to buy when you are financially ready and can afford the home you want, regardless of current interest rates. Additionally, homeowners can always refinance later on if rates drop significantly, reducing their costs.
As we have seen, the current housing market is being impacted by high mortgage rates and elevated home prices, with consumer sentiment toward the housing market is lower than in pre-pandemic times. While 59% of respondents say that it is a good time to sell a home, it’s still much lower than it was a year ago. In addition, the majority of consumers expect home prices to decrease or remain flat over the next year, which may discourage some potential home sellers.
So, the question remains, should you sell your house in 2023 or wait until 2024? The answer is not straightforward, as it depends on a number of factors specific to your personal situation. Some of the key considerations are discussed below.
- Financial Situation: If you have a pressing need for cash, such as paying off debt, making a significant purchase, or covering medical expenses, selling your home in 2023 might be necessary. However, if your financial situation is secure and you do not need the money right away, it might be wise to wait until the market conditions improve.
- Housing Market Conditions: If the housing market conditions continue to be impacted by high mortgage rates and elevated home prices, it might not be the best time to sell your home in 2023. You could end up getting a lower price for your home or struggle to find a buyer. On the other hand, if the market conditions improve, such as mortgage rates dropping or home prices leveling off, then selling your home in 2023 might be a good idea.
- Future Plans: If you have plans to buy a new home in the near future, it may be better to wait until 2024 to sell your current home. This way, you can take advantage of any market improvements and get a better price for your home, which could help with the down payment and closing costs of your new home.
- Home Condition: If your home is in need of repairs or renovations, it might be wise to wait until 2024 to sell your home. This will give you time to complete the necessary upgrades, which could increase the value of your home and help you get a better price when you sell.
- Timing: If you are considering selling your home in 2023, it’s important to consider the timing of the sale. The spring and summer months tend to be the best time to sell a home, as more buyers are actively looking to purchase a home. If you sell your home during the winter months, when the market is typically slower, you might not get as much money for your home.
Should I Sell My House Now or Wait?
Based on the latest weekly housing market statistics by Realtor.com, it appears that the market is currently in a state of imbalance with slow activity from buyers and a growing inventory of homes for sale. The median listing price has grown by 7.3% over the last year but the growth in price is slowing down. Meanwhile, the number of new listings is still declining but at a slower pace than before. The active inventory of homes for sale continues to increase, and homes are spending more time on the market compared to last year.
For sellers, the current market conditions suggest that they should be mindful of the slower market pace and set their expectations accordingly. This means that they should be prepared for homes to spend more time on the market and for the selling process to be more prolonged than it has been in the past few years. To increase the chances of a successful sale, sellers should ensure that their homes are priced appropriately, in good condition, and marketed effectively to attract potential buyers. They should also consider working with a real estate agent who has experience navigating the current market conditions.
In conclusion, while the current housing market conditions present some challenges for sellers, there are still opportunities to sell successfully. By being mindful of the market trends, preparing their homes appropriately, and working with an experienced real estate agent, sellers can increase their chances of a successful sale.
The decision to sell your home in 2023 or wait until 2024 depends on your personal situation and the housing market conditions. It’s important to carefully weigh your options, consider the key factors discussed above, and seek the advice of a professional if needed. Ultimately, the goal is to sell your home for the best price possible and to secure your financial future.
The current housing market is favorable for sellers, with supply constraints and moderate buyer demand, making it a good time to sell. Additionally, with borrowing rates on the rise, it may be wise to sell sooner rather than later to capitalize on favorable conditions. However, if you are only looking to time the market or don't have a plan after selling your house, it may be better to wait.
To get the best outcome, consider finding a skilled real estate agent to assist with the sale. The National Association of Realtors (NAR) reports that 90 percent of sellers work with an agent, and the typical home sold with an agent in 2021 went for $318,000, compared to $260,000 for homes sold without an agent. Whether you sell in 2023 or wait until 2024, it's essential to evaluate your motives, consider the current market conditions, and seek the advice of a reputable real estate agent.