A lot of homeowners who are thinking about selling have two main concerns that are stopping them. First, they feel stuck because mortgage rates are higher right now. And second, they're worried that there won't be many options to buy because there's a shortage of homes on the market. So, let's talk about each of these challenges and I'll give you some tips on how you can overcome them.

Challenge #1: The Reluctance to Take on a Higher Mortgage Rate

According to the Federal Housing Finance Agency (FHFA), the average interest rate for current homeowners with mortgages is less than 4% (see graph below):

You know, these days the standard interest rate for a 30-year fixed mortgage is hovering around 7%. Because of this, a lot of folks who own homes are deciding to stick it out rather than try to move to a new place where they'd have to pay more for a loan. We call this situation the mortgage rate lock-in effect.

The Advice: Waiting May Not Pay Off

You know, the experts are saying that mortgage rates are supposed to go down slowly this year because inflation is cooling off. But, here's the thing - nobody really knows for sure where those rates are headed. Plus, guess what? Home prices are getting higher again. So, if you're thinking about selling, you might want to consider doing it now. That way, you can avoid paying more for a new home if prices keep going up. And, hey, if the experts turn out to be right and rates do go down, you could always refinance down the line. It's always good to have options, right?

Challenge #2: The Fear of Not Finding Something to Buy

So, here's the deal: a lot of homeowners are not really keen on accepting a higher interest rate on their mortgages. And because of that, we're going to see a decrease in the number of homes being put up for sale. And you know what that means? Less inventory available for potential buyers. Lawrence Yun, the big-shot Chief Economist at the National Association of Realtors (NAR), explains it all.

“Inventory will remain tight in the coming months and even for the next couple of years. Some homeowners are unwilling to trade up or trade down after locking in historically-low mortgage rates in recent years.””

— Lawrence Yun, Chief Economist at the National Association of Realtors (NAR)

I totally get it. I mean, it's great that the limited housing supply is making your house really attractive to those eager buyers. But at the same time, it's making you a bit hesitant to sell, right? I understand that you're worried about struggling to find something else to purchase. Trust me, you're not alone in feeling that way.

The Advice: Broaden Your Search

If you're worried about not being able to find your next home, don't forget to explore all your options. Check out different types of housing like condos, townhouses, and even newly constructed homes. This will give you a wider range to choose from. Also, if you have the flexibility to work remotely or in a hybrid setting, you can expand your search to areas you hadn't considered before. By looking further away from your workplace, you might find more affordable housing options.

Bottom Line

Instead of stressing about all the challenges, how about we shift our focus to what you can actually control? I think it would be a great idea for us to connect and get you paired up with a seasoned professional who knows their way around this process. They'll be able to help you navigate these tricky waters and find your dream home. So, what do you say? Let's make it happen!