Two main factors are holding back many homeowners who are considering selling. The two main reasons are that they feel trapped by the higher mortgage rates of today and are worried about not being able to buy anything because supply is so limited. Challenge #1: The Reluctance To Take On A Higher Mortgage RateAccording the Federal Housing Finance Agency, the average interest rate of current homeowners with mortgages was less than 4%. (See graph below). But today, the 30-year fixed rate mortgage offered to buyers is closer 7%. Many homeowners choose to stay in their current home rather than move to a new one with a higher mortgage rate. The Advice: Waiting may not Pay OffWhile many experts predict that mortgage rates will fall gradually this year due to a slowdown in inflation, this does not mean you should delay selling your home. Mortgage rates are notoriously difficult to predict. Right now, home prices are on the rise. You’ll be able to beat rising home prices if you move now. If experts are right, and rates drop, you can refinance at a later date. Challenge #2: The Fear of not Finding Something to PurchaseWhen so many homeowners are unwilling to take on a high rate, fewer houses will come onto the market. Inventory will be kept low. Lawrence Yun, Chief economist at the National Association of Realtors explains that inventory will remain tight for the next few years. Some homeowners are reluctant to trade up or down after locking in historically low mortgage rates in recent times. You can find more options by looking at different housing types, including condos and townhouses. You may also be able consider areas that you had not previously considered if you are able to work remotely or hybrid. You may find more affordable options if you look farther from your workplace. Bottom LineInstead focusing on challenges, focus on things you can control. Contact a local agent to work with someone who knows how to navigate the waters and find you the perfect home.
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