4 Reasons to Sell Your Home Now
Let's go over a few of the reasons it makes sense to sell your home now.
1. Mortgage rates are likely heading higher. The Federal Reserve has made it clear that interest rates will be moving higher. Fed chief Janet Yellen recently said that rates will move higher later this year after seven years of central bank easing that helped the battered real estate market bounce back following the subprime lending crisis.
We're already seeing market sentiment starting to factor in the inevitable hike. After bottoming out at 3.77 percent in April, rates for 30-year mortgages have crept up to 4.26 percent, according to rate monitor Bankrate (RATE).
This should be alarming if you have a house to sell. It means that potential buyers are getting less bang for their borrowed buck, and that could drive home prices lower to balance things out. With cash buyers peaking last year, the market's now at the mercy of mortgage-seeking buyers. Higher rates won't help.
2. You may as well get out while the getting is good. Last month was great for sellers. Existing homes sold at the fastest pace since early 2007. The National Association of Realtors is reporting that home sales rose 3.2 percent in June, pushing the seasonally adjusted annual rate to 5.49 million homes changing keys.
Even the real estate agency is conceding that the strength in turnover is likely tied to fears that rates will move higher in the near future. Median sale prices have risen 6.5 percent over the past year -- to a new record of $236,400 -- but that momentum will be challenged in the new normal of rising mortgage rates.
3. Locking in today's low rates. A common gripe during the housing boom is that if someone sells a home, they still need to find a new place to live. This could be an ideal time to consider trading down, moving to a more affordable housing market, or possibly even renting. However, if selling now results in buying now, it's probably a good idea to do it sooner rather than later to lock in today's rates.
Waiting for rates to move higher may result in better prices as a buyer, but is that a chance you want to take? You don't want to be priced out of your next address.
4. Your home will stand out. There were 2.3 million existing homes on the market at the end of June, according to the National Association of Realtors. Given the recent spike in buying we can divide that by the 5.49 million annual rate of seasonally adjusted sales to see that we have just a five-month supply of homes in the market. That's the lowest that it's been in years, making it easier for your own property to stand out if it's put on the market.
Home prices have posted year-over-year gains for 40 consecutive months. No streak lasts forever, and the climate is right now to consider moving on if it's something that you were planning on doing anyway.
Motley Fool contributor Rick Munarriz has no position in any stocks mentioned. The Motley Fool has no position in any of the stocks mentioned. Try any of our Foolish newsletter services free for 30 days. Check out The Motley Fool's one great stock to buy for 2015 and beyond.