If you’ve been wavering about selling your home, it might just be time to make a final decision. This year is going to be the year of the home seller, many experts say. It has been a seller’s market for the last two years, but this year is looking to be even better.
There are several factors contributing to it being a seller’s market. Here are the main influences happening in 2017.
Reason No. 1: Mortgage rates are still low
Lower mortgage rates mean lower monthly payments. This means you can get more house for your money, which is always attractive to buyers.
Although mortgage rates have been creeping up since mid-October to slightly over 4%, the rates for a 30-year fixed mortgage—the most popular home loan—are still hovering near record 30-year lows.
They are expected to hold at this (4%) level for a while and continue to adjust up, per the National Association of Realtors®. Because mortgage rates don’t usually move in a straight line, they could be in the 4.6% to 4.8% range by the end of the year.
What does this mean for home sellers? Well, potential buyers who are knowledgeable might move quickly to close on a home before another rate hike.
Even if you aren’t ready to put your home on the market right now, if rates do nudge up by the end of the year, they’re still expected to be low enough to entice buyers. Most experts agree that the tipping point is when rates reach the 5% mark. That’s when there could start to be a slow down on the robust seller’s market.
Reason No. 2: Inventory is LOW
Remember learning in school that low supply and high demand leads to rising prices? It also applies for residential real estate. When inventory numbers drop, available homes become more valuable.
For comparison, according to NAR data, in 2007, just before the housing crash, existing home inventory peaked at 4.04 million homes for sale. Fast-forward 9 years to November 2016: There were only 1.85 million homes for sale, 9.3% lower than the year before—and a staggering 54% lower than the 2007 peak. Not only are there less homes for sale, but the time these homes have spent on the market has reduced dramatically year over year as well.
Reason No. 3: Home prices are rising
Low inventory and increased demand have forced up home prices. The median existing-home price in the US in November 2016 was $234,900, up 6.8% from November 2015, when it was $220,000, per the NAR. That was the 57th consecutive month of gains.
Higher prices benefit the seller whose property value may have dipped during the recession, sometimes to less than is owed. Because of rising prices, many homeowners whose property was underwater can now sell without a loss.
Reason No. 4: Job markets are strengthening
As unemployment decreases and wages are beginning to increase, consumer confidence will also go up. Increased confidence will encourage buyers to enter the market, also good news for sellers.
Don’t wait, because mortgage rates won’t.
By: Jennifer Sharp