If you’ve been going back and forth on listing your home, here are four reasons why 2016 is the year you should make it happen.
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It’s a Seller’s Market
Homebuying demand is apparent in the housing market, but the availability of move-in ready, affordable listings has been holding back home sales, according to National Association of REALTORS Chief Economist Lawrence Yun.
Existing home sales fell to the slowest pace in November since April 2014 because of inventory shortages. According to the latest Existing Home Sales Report, there is currently a 5.1-month supply of homes for sale. A 6-month supply is considered a balanced housing market and anything below puts the ball in a seller’s court.
You’re Probably Underestimating Your Home Equity
In 2015 only 37% of mortgaged homeowners believed they had significant (at least 20%) equity in their homes, according to data from Fannie Mae’s National Housing Survey. On the contrary, it was estimated that of those surveyed, at least 69% of those homeowners had more than 20% equity in their homes.
This matters because underestimating your home’s value may be keeping you from advancing financially with your home equity. According to Fannie Mae, homeowners who have a “negative perception gap” also likely underestimate:
- Their ability to qualify for a new mortgage.
- How large of a down payment they could make with their home equity.
- Their opportunity of selling their current home and upsizing or downsizing.
Home Prices & Values Are On the Up and Up
The benefit of increasing home prices requires little explanation for home sellers. U.S. home values grew $1.1 trillion in 2015, according to real estate research firm Zillow.
The CoreLogic Home Price Index rose approximately 6% in 2015, and experts are predicting home prices will appreciate another 5.2% nationwide in 2016.
Mortgage Rates Will Slowly Rise
A key factor in how much sellers will receive for their home is how much buyers can afford or are willing to spend. Historically low mortgage rates have helped fuel increasing home prices over the last few years while keeping homeownership attainable and affordable.
In the 2016 Housing Market Forecast, all entities that predict mortgage rates – Fannie Mae, Freddie Mac, MBA and NAR – agreed that mortgage rates will move up each quarter in 2016. Though CoreLogic is only predicting a one-half percentage point increase by the end of the year, a small boost in rates can lessen mortgage affordability for some prospective buyers, as well as home sellers who wish to purchase a home again.
If you’re thinking of selling your home in 2016 and purchasing again, download our free Upsizing and Downsizing Guide, a great resource for second, third, or fourth-time homebuyers.