Are you on the fence about selling your house? While affordability is improving this year, it’s still tight. And that may be on your mind. But understanding your home equity could be the key to making your decision easier. An article from Bankrate explains:
“Home equity is the difference between your home’s value and the amount you still owe on your mortgage. It represents the paid-off portion of your home.
You’ll start off with a certain level of equity when you make your down payment to buy the home, then continue to build equity as you pay down your mortgage. You’ll also build equity over time as your home’s value increases.”
Think of equity as a simple math equation. It’s the value of your home now minus what you owe on your mortgage. And guess what? Recently, your equity has probably grown more than you think.
In the past few years, home prices skyrocketed, which means your home’s value – and your equity – likely shot up, too. So, you may have more equity than you realize.
How To Make the Most of Your Home Equity Right Now
If you’re thinking about moving, the equity you have in your home could be a big help. According to CoreLogic:
“. . . the average U.S. homeowner with a mortgage still has more than $300,000 in equity . . .”
Clearly, homeowners have a lot of equity right now. And the latest data from the Census and ATTOM shows over two-thirds of homeowners have either completely paid off their mortgages (shown in green in the chart below) or have at least 50% equity (shown in blue in the chart below):
That means roughly 70% have a tremendous amount of equity right now.
After you sell your house, you can use your equity to help you buy your next home. Here’s how:
- Be an all-cash buyer: If you’ve been living in your current home for a long time, you might have enough equity to buy your next home without having to take out a loan. If that’s the case, you won’t need to borrow any money or worry about mortgage rates. Investopedia states:
“You may want to pay cash for your home if you’re shopping in a competitive housing market, or if you’d like to save money on mortgage interest. It could help you close a deal and beat out other buyers.”
- Make a larger down payment: Your equity could also be used toward your next down payment. It might even be enough to let you put a larger amount down, so you won’t have to borrow as much money. The Mortgage Reports explains:
“Borrowers who put down more money typically receive better interest rates from lenders. This is due to the fact that a larger down payment lowers the lender’s risk because the borrower has more equity in the home from the beginning.”
The Easy Way To Find Out How Much Equity You Have
To find out how much equity you have in your home, ask a real estate agent you trust for a Professional Equity Assessment Report (PEAR).
Planning a move? Your home equity can really help you out. Connect with a local real estate agent to see how much equity you have and how it can help with your next home.
Have you been thinking about selling your house? If so, here’s some good news. While the housing market isn’t as frenzied as it was during the ‘unicorn’ years when houses were selling quicker than ever, they’re still selling faster than normal.
The graph below uses data from Realtor.com to tell the story of median days on the market for every January from 2017 all the way through the latest numbers available. For Realtor.com, days on the market means from the time a house is listed for sale until its closing date or the date it’s taken off the market. This metric can help give you an idea of just how quickly homes are selling compared to more normal years:
When you look at the most recent data (shown in green), it’s clear homes are selling faster than they usually would (shown in blue). In fact, the only years when houses sold even faster than they are right now were the abnormal ‘unicorn’ years (shown in pink). According to Realtor.com:
“Homes spent 69 days on the market, which is three days shorter than last year and more than two weeks shorter than before the COVID-19 pandemic.”
What Does This Mean for You?
Homes are selling faster than the norm for this time of year – and your house may sell quickly too. That’s because more people are looking to buy now that mortgage rates have come down, but there still aren’t enough homes to go around. Mike Simonsen, Founder of Altos Research, says:
“. . . 2024 is starting stronger than last year. And demand is increasing each week.”
If you’re wondering if it’s a good time to sell your home, the most recent data suggests it is. The housing market appears to be stronger than it usually is at this time of year. To get the latest updates on what’s happening in your local market, connect with a real estate agent.
If one of the goals on your list is selling your house and making a move this year, you’re likely juggling a mix of excitement about what’s ahead and feeling a little sentimental about your current home.
A great way to balance those emotions and make sure you’re confident in your decision is to keep these three best practices in mind when you’re ready to sell.
1. Price Your Home Right
The housing market shifted in 2023 as mortgage rates rose and home price appreciation started to normalize once again. As a seller, you still need to recognize how important it is to price your house appropriately based on where the market is today. Hannah Jones, Economic Research Analyst for Realtor.com, explains:
“Sellers need to become familiar with their local market and work closely with a local agent to make sure their listing is attractive to buyers. Buyers feeling the pressure of affordability are likely to be pickier, so a well-priced, well-maintained home is the ticket to drumming up big demand.”
If you price your house too high, you run the risk of deterring buyers. And if you go too low, you’re leaving money on the table. An experienced real estate agent can help determine what your ideal asking price should be, so your house moves quickly and for top dollar.
2. Keep Your Emotions in Check
Today, homeowners are staying in their houses longer than they used to. According to the National Association of Realtors (NAR), since 1985, the average time a homeowner has owned their home has increased from 6 to 10 years (see graph below):
This is much more than what used to be the norm. The side effect, however, is when you stay in one place for so long, you may get even more emotionally attached to your space. If it’s the first home you bought or the house where your loved ones grew up, it very likely means something extra special to you. Every room has memories, and it’s hard to detach from the sentimental value.
For some homeowners, that makes it even tougher to separate the emotional value of the house from fair market price. That’s why you need a real estate professional to help you with the negotiations and the best pricing strategy along the way. Trust the professionals who have your best interests in mind.
3. Stage Your Home Properly
While you may love your decor and how you’ve customized your house over the years, not all buyers will feel the same way about your vibe. That’s why it’s so important to make sure you focus on your home’s first impression, so it appeals to as many buyers as possible.
Buyers want to be able to picture themselves in the home. They need to see themselves inside with their furniture and keepsakes – not your pictures and decorations. As Jessica Lautz, Deputy Chief Economist and Vice President of Research at NAR, says:
“Buyers want to easily envision themselves within a new home and home staging is a way to showcase the property in its best light.”
A real estate professional can help you with expertise on getting your house ready to sell.
If you’re considering selling your house, reach out to a local real estate professional to help you navigate the process while prioritizing these must-do’s.
If you’ve been holding off on selling your house to make a move because you felt mortgage rates were too high, their recent downward trend is exciting news for you. Mortgage rates have descended since last October when they hit 7.79%. In fact, they’ve been below 7% for over a month now (see graph below):
And while they’re not going back to the 3% we saw during the ‘unicorn’ years, they are expected to continue to go down from where they are now in the near future. As Dean Baker, Senior Economist at the Center for Economic Research, explains:
“It also appears that mortgage rates are now falling again. They will almost certainly not fall to pandemic lows, although we may soon see rates under 6.0 percent, which would be low by pre-Great Recession standards.”
Here are two reasons why this recent trend, and the expectation it’ll continue, is such good news for you.
You May Not Feel as Locked-In to Your Current Mortgage Rate
With mortgage rates already significantly lower than they were just a few months ago, you may feel less locked-in to the current mortgage rate you have on your house. When mortgage rates were higher, moving to a new home meant possibly trading in a low rate for one up near 8%.
However, with rates dropping, the difference between your current mortgage rate and the new rate you’d be taking on isn’t as big as it was. That makes moving more affordable than it was just a few months ago. As Lance Lambert, Founder of ResiClub, explains:
“We might be at peak “lock-in effect.” Some move-up or lifestyle sellers might be coming to terms with the fact 3% and 4% mortgage rates aren’t returning anytime soon.”
More Buyers Will Be Coming to the Market
According to data from Bright MLS, the top reason buyers have been waiting to take the plunge into homeownership is high mortgage rates (see graph below):
Lower mortgage rates mean buyers can potentially save money on their home loans, making the prospect of purchasing a home more attractive and affordable. Now that rates are easing, more buyers are likely to feel they’re ready to jump back into the market and make their move. And more buyers mean more demand for your house.
If you’ve been waiting to sell because you didn’t want to take on a larger mortgage rate or you thought buyers weren’t out there, the recent decline in mortgage rates may be your sign it’s time to make your move. When you’re ready, connect with a local real estate agent.
Are you putting off your plans to sell because you’re worried you won’t be able to find a home you like when you move? If so, it may be time to consider a newly built home and the benefits that come with one. Here’s why.
Near-Record Percentage of New Home Inventory
Newly built homes are becoming an increasingly significant part of today’s housing inventory. According to the most recent report from the National Association of Home Builders (NAHB):
“Newly built homes available for sale accounted for 31% of total homes available for sale in November, compared to an approximate 12% historical average.”
That means the percentage of the total homes available to buy that are newly built is well over two times higher than the norm. And even more new homes are on the way.
Recent data from the Census shows there’s been an uptick in both housing starts (where builders break ground on more new homes) and housing completions (homes where construction just wrapped).
And while some people may worry builders are building too many homes, that isn’t a concern – if anything, the recent increase is really good news. As Lawrence Yun, Chief Economist at the National Association of Realtors (NAR), explains:
“Even more home building will be needed with the housing shortage persisting in most markets . . . Another 30% rise in home construction can easily be absorbed in the marketplace . . .”
How This Helps You
Since the supply of existing homes for sale is still low right now, the increase of new-home construction can be a game changer because it gives you more options for your search.
Picture yourself in a home that’s new from the ground up: new appliances, fresh paint, fewer maintenance needs because everything is new, and so much more. Doesn’t that sound nice?
And it may be more within reach than you ever imagined. In addition, some builders are offering things like mortgage rate buy-downs for homebuyers right now. This can help offset today’s affordability challenges while also getting you into your dream home. In a recent article, Patrick Duffy, Senior Real Estate Economist at U.S. News, explains:
“Builders have been using mortgage interest rate buydowns for many years as a sales incentive whenever interest rates are relatively high, . . .Today more builders are offering rate buydowns for the entirety of the loan, allowing buyers to finance more home for the same payment amount.”
Just remember, the process of buying from a builder is different from buying from a home seller, so it’s important to partner with a trusted real estate agent who knows the local market. They’ll be your go-to resource for coordinating with the builder, reviewing contracts, and more.
If you’re trying to sell so you can make a move but you’re having a hard time finding a home you like, connect with a local real estate agent to explore all of your options, including the newly built homes in our area.
If your listing has expired and your house didn’t sell, it’s completely normal to feel a mix of frustration and disappointment. Understandably, you’re probably wondering what may have gone wrong. Here are three questions to think about as you figure out what to do next.
Did You Limit Access to Your House?
One of the biggest mistakes you can make when selling your house is restricting the days and times when potential buyers can tour it. Being flexible with your schedule is important, even though it might feel a bit stressful to drop everything and leave when buyers want to see it. After all, minimal access means minimal exposure to buyers. ShowingTime advises:
“. . . do your best to be as flexible as possible when granting access to your house for showings.”
Sometimes, the most determined buyers might come from far away. Since they’re traveling to see your house, they may not be able to change their plans easily if you only offer limited times for showings. So, try to make your house available as much as you can to accommodate them. It’s simple – if no one’s able to look at it, how will it sell?
Did You Make Your House Stand Out?
When you’re selling your house, the old saying matters: you never get a second chance to make a first impression. Putting in the work to make the exterior of your home look nice is just as important as how you stage it inside. Freshen up your landscaping to boost your home’s curb appeal so you can make an impact upfront. As an article from U.S. News says:
“After all, if people drive by, but aren’t interested enough to walk through the front door, you’ll never sell your house.”
But don’t let that impact stop at the front door. By removing personal items and reducing clutter inside, you give buyers more freedom to picture themselves in the home. Plus, a fresh coat of paint or thorough floor cleaning can work wonders in sprucing up the house for potential buyers.
Did You Price Your House at Market Value?
Setting the right price is key. While it might be tempting to push the price higher to maximize your profit, overpricing your house can actually turn off potential buyers and slow down the selling process. Forbes notes:
“Pricing a home too high could lead to a slower sale or force the seller to drop their price.”
If your house is priced higher than others like it, it may discourage buyers, resulting in increased time on the market. Pay attention to the feedback people give your agent during open houses and showings. If lots of people are saying the same thing, it might be a good idea to think about lowering the price.
For all these insights and more, rely on a trusted real estate agent. A great agent will offer expert advice on relisting your house with effective strategies to get it sold.
It’s natural to feel disappointed when your listing has expired and your house didn’t sell. Connect with a reliable real estate agent to determine what happened, and what changes you should make to get your house back on the market.