There are plenty of scenarios that make selling your home necessary — whether it’s to move across the country to be closer to family, because you want to downsize or you can’t afford mortgage payments anymore.
But when your timeline to move is flexible, you’ll want to strategize over when and how you place your home on the market to find buyers, maximize profit and make it easier to buy a new home, if that’s your next move.
If you’re on the fence about selling, you have a few choices: You can put your house up for sale to take advantage of current low inventory, you can wait to see how interest rates and inflation play out or you can opt to stay in your current home for the foreseeable future.
Here are three reasons you shouldn’t sell your home in 2024, along with three reasons it’s a good idea to make the jump in the next 12 months:
— Wait to sell: You bought or refinanced in the last couple of years.
— Wait to sell: You’re worried about affording your next purchase.
— Wait to sell: You’re worried about finding your next home.
— Sell in 2024: A high interest rate doesn’t scare you.
— Sell in 2024: You understand your home’s value.
— Sell in 2024: You need to move.
[READ: 5 Reasons to Get a Presale Home Inspection]
Wait to Sell: You Bought or Refinanced in the Last Couple of Years
If you’re one of the many homeowners who have moved or refinanced in the last few years, there’s no reason to consider selling your home in the immediate future. Hopefully, your low mortgage payment have helped ease any financial woes.
Ahead of 2022, many homeowners were able to lock into mortgage rates below 3%, which makes selling any time in the near future far less attractive. Unless other factors make a move necessary, enjoy the low interest rate you locked in and continue to build equity in your home.
Mortgage rates have risen and dropped many times since 2022, peaking at 7.79% for a 30-year, fixed-rate mortgage during the week of October 2023, according to Freddie Mac. As of March 28, 2024, Freddie Mac reported the average interest rate for a 30-year, fixed-rate mortgage was 6.79%.
If you managed to secure an interest rate below 3% — or even 2%, for some homeowners — you’ll see little incentive to more than triple your interest rate for a new home. And you won’t be the only homeowner feeling locked into your property based on mortgage rates.
“While it is likely to diminish, the mortgage lock-in effect is still going to keep a sizable number of homeowners from selling in 2024,” says Danielle Hale, chief economist for Realtor.com. “Per the latest data, 90% of outstanding mortgage debt has a rate below 6%, with 65% of the total at a rate less than 4%.”
Homeowners may start to see more reason to move as mortgage rates drop below 6%, Hale adds.
Wait to Sell: You’re Worried About Affording Your Next Purchase
Over the course of the last couple of years, worries about affording your next home purchase were tied to the housing market’s rising prices and lack of new homes for sale. Now, add interest rates between 6% and 7% to the mix, and there seems to be little financial benefit to buying a new home. Don’t be afraid to wait to sell your home if you think the timing isn’t right.
Even with plenty of home equity, you may find that your buying power is diminished when you factor in how much more you would have to pay toward interest each month.
“That’s a tough financial calculus, and that’s keeping the more discretionary sellers out of the market right now,” says Lisa Sturtevant, chief economist for multiple listing service Bright MLS.
If you can’t afford the home you would want to have next, it makes sense to wait to put your house on the market.
[Related:What Happens to the Money You Make When You Sell Your House?]
Wait to Sell: You’re Worried About Finding Your Next Home
Housing inventory still remains low, even though it increased by 0.3 months year over year in February, according to a recent National Association of Realtors report. Plenty of homeowners are opting not to list their home for the time being, and while there are fewer buyers than there were at the peak of the coronavirus pandemic, more are coming back to the market than you may expect.
“Despite affordability challenges, buyers are finding ways to make the math work,” says Orphe Divounguy, senior economist for Zillow. “There are a lot of millennials who want to get into homeownership. Lower inflation has also resulted in higher real wages and financial wealth and we also have a surge in population growth. All of those factors are supportive of housing demand. The limiting factor remains inventory. There are not enough homes available for sale, and that’s keeping costs high.”
Sell in 2024: A High Interest Rate Doesn’t Scare You
Mortgage rates reached higher levels in 2023 than in recent memory. For many homeowners, that’s enough to opt to stay in their current house. For others, the interest rate isn’t as much of a concern.
“There may be buyers that are not as rate sensitive,” says Mike Reynolds, vice president of investment strategy at Glenmede, a Philadelphia-based wealth management firm. You may be a cash buyer without plans to finance your next house at all, or you may have enough equity in your current home to feel confident you can buy down your next mortgage rate to a more attractive level.
The more prolonged period of interest rates above 6% has also given many would-be homebuyers the opportunity to get used to the prospect of higher mortgage costs — it may require an adjusted budget, but it doesn’t necessarily mean you can’t make a purchase.
“Buyers seem to be OK with the idea that a mortgage rate in the 6% to 7% range is the norm, not the exception,” Divounguy says.
Plus, at the end of the day, there is no way to perfectly time the market. If you can afford to move and want to move, selling your home in 2024 may be the best timing since there’s no way to know what lies ahead.
[Related:How to Sell Your Home While Living In It]
Sell in 2024: You Understand Your Home’s Value
Many housing markets across the U.S. are still seeing plenty of buyer interest, but properties aren’t getting the regular bidding wars and sky-high sale prices they were in 2021. If you sell your home in 2024, buyers will be less inclined to offer above the asking price — and they may not look at all if the asking price is too much.
Divounguy says the houses selling fast today and receiving more than one offer are those that are priced to sell and offer all the marketing bells and whistles, like a 3D home tour and professional photography.
Unless your real estate agent says otherwise, based on recent sales in your area, you’re unlikely to get $100,000 above the asking price for your starter home without an appraisal contingency. With buyers looking carefully at their budgets, they’ll be making serious offers based on what makes sense for their budget and what they believe your home is worth.
Sell in 2024: You Need to Move
If you need to move for any reason, it’s still possible to sell your home and find a new one. If you lost your job, you may be worried about your ability to continue to pay your mortgage. If that’s the case, selling may be a valid option. But plenty of others are opting for a life change that involves moving to another state, more room for a growing family or a bigger footprint needed for permanent work-from-home space.
A profitable sale and purchase of a new home is still possible — but proper preparation and realistic expectations are key.
“A consideration today’s homeowners should review is what their home equity picture looks like,” says Hale. “With the typical home listing price up 40% from just five years ago, many home sellers are sitting on a healthy equity cushion. This means they are likely to walk away from a home sale with proceeds that they can use to offset the amount of borrowing needed for their next home purchase.”
However, don’t expect the Federal Reserve to be too eager to drop rates suddenly in the event of an economic downturn. While mortgage interest rates are technically independent of the Fed’s funds rate, they often reflect changes.
“The Fed’s going to be very careful not to reignite inflation that has become very sticky,” says Reynolds, who anticipates mortgage rates to remain on the high end through the end of the year.
More from U.S. News
Will the Silver Tsunami Change the Housing Market?
Spring Cleaning Checklist for Your Home
Why You Should (and Shouldn’t) Sell Your Home in 2024 originally appeared on usnews.com
Update 04/04/24: This story was published at an earlier date and has been updated with new information.
