After almost two years of exceptionally favorable interest rates, the U.S. now faces the highest mortgage rates since 2008, at 6.35% for a 30-year mortgage.

Thanks to this, the recent boom in home sales is eventually slowing as buyers take stock of the long-term implications of such a large investment.

In this light, if you’re considering selling your home, you’re probably asking yourself whether you should sell your house now or wait until next year.

Keep reading to find out the pros and cons of selling this year or next.

Should I Sell My Home in 2022 or 2023?

Selling your home and moving are life-changing events, so there’s every reason to act with caution at this juncture. Even if you’re eager to move on to greener pastures, or keen to get rid of unwanted property, timing is everything in an unpredictable real estate market.

The last two years have seen skyrocketing prices thanks to high demand driven by low mortgage rates.

Now, the tide is starting to turn as demand slows. Yet, home prices in most areas continue to rise steadily, albeit a little slower. 

You probably have questions about trying to sell amid 8% inflation and ever-escalating mortgage rates, too. Plus, fears of a recession in 2023 are causing caution on the part of potential home buyers.

Will things improve with time, or is this as good as it’s going to get in the foreseeable future?

Reasons to Sell Your Home in 2022

Despite the uncertainties, there are still plenty of rock-solid reasons to sell your home as soon as possible. These are:

There’s a Seller’s Market in Most Places

Most real estate agents believe we’re still in a seller’s market. Sales are still steady, and prices haven’t declined much yet.

While mortgage rates are high at the moment, many buyers believe they’ll continue to increase for some time. If inflation doesn’t come down soon, it’s likely the federal government may implement further rate hikes.

This creates a sense of urgency for those who missed out on lower rates to start with. 

Housing Supply is Super Low in 2022

Thanks to ongoing supply chain issues, the construction industry is still struggling to get back into full swing. The frenzied home buying activity of the last two years means many existing homes have already found new owners.

As a result, the U.S. is still short of around three million homes to meet the current demand. This makes 2022 a good time to sell your home before the recession causes a drop in demand.

Prices Are Going Up

Across the nation, home price increases decelerated in the second quarter, but they still showed a 16.1% year-over-year gain. This means you’ll still get more for your home now than in the first quarter.

While you could see this as a reason to hold on a little longer, that might prove unwise if a recession slows spending next year and home prices start to plummet.

Although times of recession don’t always impact home prices negatively, that depends on numerous factors out of your control. 

Cash Is King

Cash home sales boomed during 2021 and they’re still a popular option for investors. As the market holds steady, these cash buyers are keen to snap up homes to fix and flip.

While these investors generally pay a little less than the going rate for homes, you’ll save other areas when you sell your home for cash.

In addition, rapid rent increases mean investors are keen to snap up homes suitable to fix and rent. Plus, there’s also a pool of buyers who sold their homes during the boom, and who now have cash available for a replacement home.

This diversity of cash buyers out there improves your chances of selling a home in any condition or market.

Your Circumstances Suit a 2022 Sale

There are several instances where your situation may demand that you sell a house as soon as possible. These include:

You Don’t Live in the Home You Want to Sell

Forecasts of challenging times on the horizon are a good reason to sell an inherited home you’re not using as well as decrease the holding costs involved with keeping the property.

The extra money from a home sale might also come in handy if your financial circumstances change. 

Rents are high at the moment, but if your investment property is causing you a headache, you’re better off selling it before prices decrease further.

You Need Money to Buy a New Home

If you’re relocating from a hot property market to a less popular one, selling your home now can help you pay cash for a smaller, more affordable property.

When you pay cash for a home, you needn’t worry about paying high mortgage rates on your new house. If you’ve already seen something you like, it only makes sense to sell your home now and snap up your dream home elsewhere.Your Home Doesn’t Suit You Anymore

There are plenty of personal reasons why people might want to sell their homes. Perhaps you’re relocating to live closer to friends or family, or found your perfect job in another city.

If your family’s growing or your children have flown the coop, now’s a good time to upgrade or downgrade accordingly. When your home no longer suits your lifestyle or your wants, it’s time to sell.You Want to Sell Your Home As-Is

Home renovations and upgrades can eat into the proceeds from your sale. So, if you have a home that could do with some costly fixes to make it market-ready, it’s worth your while to consider a cash offer while they’re readily available. 

In most cases, low inventory and increasing home prices mean cash buyers will pay a little more for a home than they will in lean times. As demand decreases, buyers also become more likely to demand upgrades and improvements as a condition of the sale.

Bearing the above in mind, there are still plenty of reasons to think, “Should I sell my house in 2023?”

The Good Times Can’t Last Forever

With economists predicting a high likelihood of a recession in 2023, it makes sense to sell your home now. A recession means increased unemployment and fewer qualified buyers.

So, even if home prices don’t plummet, you could still have difficulty finding a taker if you wait until next year. On top of that, if prices increase, as they did during the recession of 2001, you’ll also have to pay a higher price for your new home.

The bottom line is that we live in very uncertain times. We’ve just undergone a devastating pandemic and the Ukraine war is still impacting economies across the globe. 

Based on these anomalies, it’s difficult to predict the future with any certainty, which makes selling your home in 2022 an attractive proposition. 

Reasons For Selling Your Home in 2023

With the above benefits in mind, there is still a lot to consider when you decide to sell your home. If you’re happy where you are and don’t have a solid long-term plan, it’s better to wait until you’ve got more clarity.

Other reasons to wait until 2023 to sell your home include:

You Haven’t Found a New Home Yet

Right now, selling your existing home and renting accommodation until you find something else isn’t a good option. Rents are currently sky-high and may increase further.

With a fixed-interest mortgage, it’s much easier to control your budget and predict your future expenses as inflation soars.

Likewise, if you can’t afford to pay the elevated prices in current times, it’s best to stay where you are. During a real estate boom, everyone pays more for homes.

So, you’ll make less profit on the sale of your home, or even lose out if you sell now and buy a new home.

If you’re considering moving to a more expensive area, it’s best to wait. Prices on luxury properties tend to decline first during a recession. 

You Owe a Lot of Money on Your Mortgage

Many homeowners took advantage of preferential interest rates in 2020 and 2021 to refinance their high mortgage rates in favor of low repayments. 

If you’ve taken this route, it doesn’t make sense to abandon your favorable rates to pay much higher interest on a new mortgage. 

Remember, the majority of your mortgage installment goes toward interest for at least four or five years after you finance your home. So, unless you’ve been paying for your house for longer than that, you’re bound to lose out by selling now. 

Unless the profits from the sale of your home can cover what you owe on your mortgage and then some, it makes sense to wait a few years before selling. 

You’ll Pay Exorbitant Capital Gains Taxes

Unless you’ve owned and lived in your home for more than two of the five years preceding the sale, you’ll pay around 37% capital gains tax on the proceeds of your home sale. 

So, if you’ve bought your home recently, it’s best to wait out this period before you sell.

You’re in the Middle of Renovating Your Home

If you’re busy refurbishing your home in the hopes of achieving a higher price, it makes sense to wait until you’ve completed these upgrades. Incomplete home improvement projects decrease the appeal of your home and might put buyers off.

What’s more, when you do find a buyer, they’re likely to insist you complete the upgrades first without increasing their offer.

In this case, it makes sense to complete high ROI home improvements before you sell your house. 

There Are Benefits to Selling Your Home During a Recession

When you sell your home during a recession, you’re eliminating the burden of paying a mortgage you can’t afford. If you’ve got a second home that you don’t want to sell, it makes sense to keep it as long as you can.

Although you’ll be funding a depreciating asset, having a large ticket item to sell could be your saving grace if you lose your job, or the cost of living escalates well beyond your means.

If housing prices plummet during a recession, homes in poor condition depreciate the least. In this light, there’s no rush to sell a sentimental inherited home right now or get rid of your home if it’s in a state of disrepair.

You could benefit from selling it as-is at a time when more luxurious property prices are declining. 

Never forget the fact that each recession provides unique financial challenges, making it very difficult to predict what may happen to the real estate market. In this light, unless you’ve got your heart set on renovating an as-is home yourself, it still makes sense to sell it now. 

In times of recession, the federal government often decreases interest rates to stimulate spending. So, if you hold onto your home until then, you could benefit from financing a new home at a decreased rate. 

Despite this, economists predict interest rates will remain at around 5% well into 2024. 

If You Need To Sell Your House Fast

If you’re selling your home due to a divorce, an urgent relocation, or to avoid paying holding costs on an unwanted inheritance, you want action. You don’t want to spend time wondering, if you should sell your house now or wait until 2023.

There is an easy way to settle this. Selling to a cash home buyer is a straightforward process that guarantees a fast sale.

iBuyer can connect you with a multitude of interested investors right away. Enter your home address here to receive a fast, fair valuation of your property.

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