Your Needs Matter More Than Today’s Mortgage Rates

If you’re thinking about selling your house right now, chances are it’s because something in your life has changed. And, while things like mortgage rates are a key part of your decision on what you’ll buy next, it’s important to not lose sight of the reason you want to make a change in the first place. It’s true mortgage rates have climbed from the record lows we saw in recent years, and that has an impact on affordability. With rates where they are right now, some homeowners are deciding they’ll wait to sell because they don’t want to move and have a higher mortgage rate on their next home. As Danielle Hale, Chief Economist at Realtor.com, explains: “. . . homeowners who locked in a 30-year fixed rate in the 2-3% range don't necessarily want to give that up in exchange for a rate in the 6-7% range.” But your lifestyle and your changing needs should matter more. Here are a few of the most common reasons people choose to sell today. Any one of these may be more important than keeping your current mortgage rate. As Ali Wolf, Chief Economist at Zonda, says in a recent tweet: “First-time and move-up buyers are both active . . . the latter driven by life changes. Divorce, marriage, new higher paid job, and existing home unsuitable all referenced.”  Relocation Some of the things that can motivate a move to a new area include changing jobs, a desire to be closer to friends and loved ones, wanting to live in a dream location, or just looking for a change in scenery.  For example, if you live in suburbia and just landed your dream job in NYC, you may be thinking about selling your current home and moving to the city for work.  Upgrading Many homeowners decide to sell to move into a larger home. This is especially common when there’s a need for more room to entertain, a home office or gym, or additional bedrooms to accommodate a growing number of loved ones. For example, if you’re living in a condo and decide it’s time to seek out a home with more space, or if your household is growing, it may be time to find a home that better fits those needs.  Downsizing With inflation driving up everyday expenses, homeowners may also decide to sell to reduce maintenance and costs. Or, they may sell because someone’s moved out of the home recently and there’s now more space than needed. It could also be that they’ve recently retired or are ready for a change. For example, you’ve just kicked off your retirement and you want to move to somewhere you can enjoy the warm weather and have less house to maintain. Your new lifestyle may be better suited for a different home.  Change in Relationship Status Divorce, separation, or marriage are other common reasons individuals sell to buy different homes. For example, if you’ve recently separated, it may be difficult to still live under one roof. Selling and downsizing may be better options. Health Concerns If a homeowner faces mobility challenges or health issues that require specific living arrangements or modifications, they might sell their current home to find one that works better for them. For example, you may be looking to sell your home and use the proceeds to help pay for a unit in an assisted-living facility.  With higher mortgage rates, there are some affordability challenges right now – but your needs and your lifestyle matter too. As a recent article from Bankrate says:  “Deciding whether it’s the right time to sell your home is a very personal decision. There are numerous important questions to consider, both financial and lifestyle-based, before putting your home on the market. . . . Your future plans and goals should be a significant part of the equation . . .” Bottom Line If you’re ready to find your next home, connect with a real estate professional. That way you have an expert on your side to help you navigate the process and find a home that can deliver on what you’re looking for. 

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A Smaller Home Could Be Your Best Option

Many people are reaching the point in their lives when they need to decide where they want to live when they retire. If you’re a homeowner approaching this stage, you have several options to explore. Jessica Lautz, Deputy Chief Economist and Vice President of Research at the National Association of Realtors (NAR), says:“As we see the transition of the large Baby Boomer generation age into retirement, it will be interesting to see if they move in with their Millennial and Gen Z children or if they stay put in their own homes.”Lautz lists two options: move into a multigenerational home with loved ones, or stay in your current house. Multigenerational living is rising in popularity, but it isn’t an option for everyone. And staying put may fit fewer and fewer of your needs. There’s a third option though, and for some, it’s the best one: downsizing.When you sell your house and purchase a smaller one, it’s known as downsizing. Sometimes smaller homes are more suited to your changing needs, and moving means you can also land in your ideal location.In addition to the personal benefits, downsizing might be more cost effective, too. The New York Times (NYT) shares:“Many downsizers expect to improve their retirement income stream if their new home costs less than what their old house sells for. Lower utility costs, insurance and property taxes — as well as investment returns on the proceeds — can also improve the bottom line.”Being in a strong financial position is one of the most important parts of retirement, and downsizing can make a big difference.A key part of why downsizing is still cost effective today, even when mortgage rates are higher than they were a year ago, is the record-high level of equity homeowners have. Leveraging your equity when you downsize can lower or maybe even eliminate the mortgage payment on your next home.So, not only is the upkeep of a smaller home likely more affordable, but leveraging your home equity could make a big difference too. Your local real estate advisor is the best resource to help you understand how much equity you may have in your current home and what options it can provide for your next move.Bottom LineIf you’re a homeowner getting ready for retirement, part of that transition likely includes deciding where you’ll live. Let’s connect so you can understand your options and explore your downsizing opportunities.

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