Despite low inventory and record high sale prices, home sales were up almost 7% in May. The market continues to favor sellers, but these conditions won’t last forever. If you want to make the maximum possible return, then it would be advisable to start planning your sale within the next two months.
If you’re planning to sell your family home to move-up or downsize, or even if you are thinking about selling an investment property, the current home market in the U.S. means that now is one of the best times to talk to your realtor.
Costlier Mortgages Could Soon Erode Buyer Interest
With home sales healthy in 2018, there is a risk that sellers will become complacent and move too slowly. While it’s possible that demand and even average prices could increase, there is also a risk that buyer interest will die down, particularly because it is becoming more expensive to buy a home.
The average 30-year mortgage on a fixed rate has risen to 4.59%, compared to 4.03% in January. The Federal Reserve will continue to raise central rates throughout this year and into the next, which means that mortgage costs are only going to go up. Some buyers who are on the fringe today could be priced out of the market by the end of the year.
Previously Owned Home Sales are Sliding
The biggest growth has come from newly built single-family homes, while previously owned homes have not performed as well. If you are selling this month or in the very near future, then you could turn this disadvantage into an advantage.
- Lumber prices are at record highs, so the average new home construction costs are almost $9000 more today than at the beginning of the year.
- Inventory of new homes is low.
These two key factors could mean that competitive pricing and marketing with a proven realtor could help you to sell your previously owned home.
If you are set on selling this year then it would be risky to wait for the ‘best’ market conditions. While prices could increase, demand is at the risk of tapering off, particularly with rising interest rates. Conditions today could mean selling your home at a reasonable price, with a profit, and in a market where there are plenty of buyers looking for the right deal before the market turns.
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