Sell My House Now or Wait?
Home sales have slowed a lot since the highs of the market 4 years ago. The total number of homes sold in Utah is very close to the lowest level in the last 5 years. This has caused home prices to drop about 10% from the top of the market in 2022. However, homes priced below $500,000 have probably rebounded 100%. Higher interest rates has really helped lower the amount of properties that people want to sell along with not enough new affordable housing being built. Interest rates have settled to around 7% off the highs of around 8%. So how do you decide if now is the smartest time to buy or sell? When thinking, should I sell my house now in Utah, look at these five factors to help you determine if you should sell your house in early 2024 or if you should wait.
Have Interest Rates Now Stabilized?
Interest rates are playing a big role in this slowing market. Mortgage rates the last 5 years chart (see the video at the right to learn how the chart in the link works) were historically low around July 2021, and at 3% starting the year in 2022. Then rates rose very fast to a high of 7.76% in November of 2023, then down to about 7% currently.
No one knows what will happen as we move through 2024 and start a new year, but currently it looks like mortgage interest rates may stay in the mid 6’s to lower 7’s. If this happens, home values will probably very slowly creep up especially homes priced below $500,000.
If you are looking to buy a home, these high interest rates can make home affordability a problem. One solution is to get an adjustable rate mortgage that will stay locked for a few years and then refinance when rates come down. However, keep in mind anything is possible, and rates may not come down for years.
Foreclosure Moratorium Is Over
Another factor to consider is the end of the foreclosure moratorium put in place under the Biden ministration when Covid-19 hit. With the moratorium homeowners who were having trouble making mortgage payments could request a forbearance from their lender. The deadline for the forbearance period was extended to July of 2021. Thousands of homes with a FHA loan and more than 90 days behind on payments could now be sent into foreclosures.
During the moratorium there were very few foreclosures on the market, this factor combined with a low supply in general meant that homes were higher in demand than ever and high home prices reflected that. Foreclosures are now ticking up which is helping increase the number of homes for sale.
In 2024 there are no moratoriums on foreclosures, but banks seem to still be doing a lot of loan modifications for people that are behind in their house payments.
The Number of New Home Builds is Down
Utah is dealing with an issue of supply and demand. Builders are not building enough new homes to satisfy the demand for homes. The low supply of homes has probably been the main reason home prices have not gone down more with high interest rates. Just as a spike in interest rates can put downward pressure on home prices, interest rates lowering to anything in the 5% area would probably cause continued home price appreciation.
Baby Boomers Homes are Coming to the Market
Baby boomers are currently in their mid-50’s to mid-70’s and own roughly one third of homes in the U.S. These means that as this generation starts to downsize, move in with family, die or go into a retirement home there will be roughly 21 million homes hitting the market in the next decade.
That means thousands of additional homes for sale each year affecting the current market prices and availability.
Should I Sell My House in 2024?
When you are trying to decide, should I sell my house now in Utah, there are a lot of things to consider. Now could be a good time to buy a home because when rates go down, home prices will go up.
Affordability can be an issue because of higher interest rates which could reduce how expensive of a home you can afford. Most experts thought that mortgage rates would have settled to the lower 5’s by the end of 2023. That didn’t happen. Timing mortgage rates is difficult. You can always refinance your mortgage down the road if rates do go down. Keep in mind that as rates lower, home prices could start to increase again because of more demand.
These aren’t the only factors, however. Do you need to be able to purchase a new home in this market? Will ending up in a bidding war on a new home make financial sense after selling your current home? Personal factors as well as your job and financial situation and even the condition of your current home will also play a big part of your decision.
If you’re worried about selling a house in poor condition or if you need to sell quickly to avoid being late on mortgage payments then consider working with a fast, non-traditional home buyer like Gary with Gary Buys Houses. Reach out to him today to get a custom quote that is tailor fit to your situation — even allowing for you to rent back your house or stay in your house for several months while you search for your new home. Click HERE to reach out to Gary today and take the stress out of deciding if NOW is the right time to sell a house in Utah.