Unfortunately, there’s no easy answer to that question. Making the decision whether or not to sell your home can be a hard one. Deciding if it’s the right time to sell is a very personal decision.
There are numerous important questions to consider, both financial and lifestyle-based, before putting your home on the market. And, if you are considering selling your home, it’s critical to understand the dynamics of the current market. Here we weigh up both options…
Reasons for Selling Now
The following are some common scenarios where you might want or need to sell in the short term.
Low inventory makes for a seller’s market
Currently we’re experiencing a historically low amount of housing available, while the demand for housing is high. This demand drives up prices giving sellers an advantage to maximize their return on investment and secure a handsome profit. Well-priced properties are also selling faster. For these reasons and others, 2023 is considered a good time to sell. According to Fannie Mae’s most recent Home Purchase Sentiment Index, more than 60 percent of respondents feel it is a good time to sell.*
Your home’s value has grown
If you’ve lived in your current home a long time, or if property values in your neighborhood have increased to the point where you’ve earned a significant amount of home equity, now might be a good time to sell and cash out. And, if you reinvest your money back in by buying another home, your equity could allow you take advantage of buying with cash or buying with a large down payment.
You need to relocate for a job or other life change
If the hand of change is knocking at your front door, selling your home may be unavoidable. You may need to move for a job, a family medical crisis, or divorce. If you’re relocating for these types of reasons, you’ll need the profits from the sale of your current home to purchase the new one.
You’re ready to downsize
Downsizing may be a more budget-friendly choice than maintaining a larger home. For older homeowners, downsizing may even be a necessity. If you can’t handle the stairs anymore, or if maintaining your home has become more than you can manage, now might be a good time to sell.
You need to upsize
Perhaps you need more room because of your growing family. Or maybe an elderly relative or child needs to come live with you. Maybe your employment changed and you need a home office. The need to upsize can play a big role in your decision to sell now.
Reasons for Waiting to Sell
Waiting to sell could be your best option, depending on a variety of circumstances that can create unfavorable selling scenarios such as:
- Higher mortgage rates. The Federal Reserve has been increasing interest rates in an effort to combat inflation. Higher mortgage rates result in higher mortgage payments. This could impact your decision to sell as your next home mortgage will likely have a higher rate than your current mortgage, resulting in a higher monthly payment.
- You recently refinanced your home. Because mortgage rates hit record lows between 2020 and 2021, many people opted to refinance their higher mortgage rates instead of opting to buy new homes. If you currently have a low interest rate, you may want to hold off on selling and buying at a higher interest rate.
- You haven’t built much equity. Because the bulk of your monthly mortgage payment goes toward interest at the outset, it usually takes about four to five years for your home to start building enough equity to make it worth selling. In addition, you’ll need to make sure your profits from the sale will cover all your closing costs.
- You can’t afford to move. The recent rise in home prices can be a double-edged sword. It’s great when you’re the seller, but you’ll need to ask yourself, ”is it worth cashing out now if I have to sacrifice those profits to buy at a higher price and/or at a higher interest rate?”
Deciding to sell your home, whether now or later, is a major decision that requires careful consideration. Your future plans and goals should be a significant part of the equation, as well as your financial needs and the realities of the current market.
If you decide to proceed with listing your home, working with an experienced Realtor® is a smart move. A real estate agent who knows your community well can help you price your home effectively, which will increase the chances of a quick and smooth sale.