When Dallas homeowners begin to think about selling their home, they seek to do their best to time it right and sell for the highest price. Lately, I have spoken to several homeowners that were initially reluctant to sell their home because of 2 key reasons plaguing many prospective home sellers. I am sharing the same advice and considerations I provide to ensure they have a well-rounded knowledge base to make the best decision for their family. Here are the 2 key reasons homeowners cite.
#1 - Buying their next home at a higher mortgage rate - Today, the average 30 year fixed mortage interest rate is running about 7%. That is a far cry from the average interest rate of current homeowners that bought or refinanced in recent years and have an interest rate under 4%. Homeowners that would really like to move are instead opting to stay in their current home instead of moving to another home with a higher interest rate. We refer to this as the "mortgage rate lock-in effect."
My advice here is straighforward and simple. Waiting may not pay off, especially as home prices continue to rise. The rise is modest and not like the past few years but prices are still rising. Buying a home now means you will save on a future higher home price, which helps you lock in a good price now that doesn't change. Consider that mortgage experts are still up in the air on whether interest rates will drop this year. As inflation cools, they should fall but forecasts do not seem to indicate they will reach anywhere under 6% any time soon. Having sold real estate for almost 20 years, I can tell you that outside of the last few crazy years of 2-4% interest rates, it was common that people knew they would always consider refinancing as a future strategy to reduce their monthly payment. Somehow, people have forgotten that was very common as interest rates were never as low as they were during the pandemic and thereafter.
#2 Not Finding a Home to Buy - Housing inventory remains low as pre-owned homes are limited as homeowners who want to move decide to hold off. Experts predict housing inventory will remain tight for the next couple of years. That again means home prices will continue to rise with more buyer demand than housing inventory available. It's simply the law of supply and demand.
My advice here is based on my experiences this year. I have had wonderful experiences in helping my clients buy new homes where incentives offered more than offset the higher interest rate. In some situations, the builders paid closing costs or "bought" down the interest rate. The added bonus was that the sales price was more than reasonable compared to pre-owned homes. For clients that preferred a pre-owned home, it was a better experience than in the last few years as there were less buyers competing and buyers had negotiation power unlike the last 3 years.
My overall advice is to first consider broadening your home buying search so you can truly understand your options. I know you will be pleasantly surprised how good the options are today to buy either a pre-owned or new home in Dallas or surrounding areas. I have access to a wealth of both off-market pre-owned homes and non-advertised new homes that might just be what you were looking for. We can also do an analysis of buying and selling to help you make the right decision.
Buying and selling a home is a big decision. However, if you have all the facts, it ends up being an easy decision to either move forward or wait for the right time for you. Reach out to me today and I'll help you through the process.