Home sales have slowed a lot since the highs of the market in May and June last year. This caused home prices to drop about 10% from the top of the market last year when interest rates shot up very fast; however, home prices have rebounded for the most part. The sudden rise in interest rates caused a dramatic slow down in home sales and the lowering values. Interest rates have now climbed to their highest level in the last 23 years to over 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 late 2023 or if you should wait. The one silver lining is that there are fewer buyers competing for the few homes that are for sale.
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 7.08% in November of 2022, then down to about 6/5% in early 2023 and now to almost 8% in the Fall of 2023.
No one knows what will happen as we end 2023 and start a new year, but currently it looks like mortgage interest rates may stay in the upper 7’s for a while. That will slow home sales and may put downward pressure on home prices.
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 2023 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. While demand was very high last year before June, demand is now down which tends to stabilize or reduce home prices.
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 2023?
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 these are more homes to look at, waiving inspections and making offers above list price are things of the past. You can take your time to view homes and make offers.
Affordability can be an issue because of higher interest rates which could reduce how expensive of a home you can afford. However, most experts think that mortgage rates should settle in the lower 5’s by the end of 2023 or sometime in the next year. You can always refinance your mortgage down the road. 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.