
Overcoming Home Selling Hurdles
Numerous homeowners contemplating a sale find themselves confronted by two significant hurdles. The first revolves around apprehensions tied to the current surge in mortgage rates, making them feel somewhat trapped. Secondly, there's the constant worry of not being able to find a suitable property due to the scarcity of available options. Let's delve into each obstacle and offer some insightful guidance on how to surmount them.
Obstacle #1: Hesitancy Towards Higher Mortgage RatesAccording to data from the Federal Housing Finance Agency (FHFA), prevailing interest rates for existing homeowners with mortgages remain below 4% (refer to the graph below). However, potential buyers are now being presented with typical 30-year fixed mortgage rates hovering around 7%. Consequently, many homeowners are opting to stay in their current residences, unwilling to bear the burden of higher borrowing costs—a phenomenon referred to as the mortgage rate lock-in effect.
Words of Advice: Waiting May Not Yield Favorable ResultsAlthough experts anticipate a gradual decline in mortgage rates as inflation cools down, it is unwise to wait indefinitely to sell. Predicting mortgage rate movements is notoriously difficult, and with home prices resurging, immediate action could save you from purchasing a new home at even higher prices. Should experts' predictions ring true and rates eventually fall, you can always consider refinancing at a later time.
Obstacle #2: Apprehension Over Property AvailabilityWith many homeowners shying away from higher rates, the housing market's inventory is dwindling. As Lawrence Yun, Chief Economist at the National Association of Realtors (NAR), points out, inventory is expected to remain tight in the foreseeable future, mainly due to homeowners choosing not to trade up or down after locking in historically-low mortgage rates in recent years. While the limited housing supply might attract eager buyers to your property, it could also leave you anxious about finding your next dream home.
Guidance: Expand Your HorizonsIf the fear of not finding a suitable home is holding you back, remember to explore all your options diligently. Look into various housing types, including condos, townhouses, and newly built homes, to increase your choices. Additionally, if you have the flexibility to work remotely or in a hybrid setup, consider areas outside your previous search parameters. Broadening your scope might reveal more affordable options in different locations.
Rather than fixating on the challenges, focus on what you can control. Seek assistance from a local real estate agent to work with a seasoned professional who can skillfully navigate these turbulent waters and find the ideal home for you.