The housing market across the country has been booming for the last few years, with 6.1 million homes sold in the United States in 2021 — a 15-year high.
Sales prices for homes were also sky high — up 18.8 percent year-over-year in 2021. This is compared to an average 4.6 percent year-over-year housing price increase in typical years. Some experts predict just under a 5 percent increase in home prices in 2022. If these predictions are correct, it may mean the hot real estate market is starting to cool a bit in some parts of the country.
Considering selling your home? If so, how do you know if the time is right? Here are a few things to ponder:
- Are you emotionally ready to sell? Homes come with lots of memories, sometimes making it difficult to let go when it's time to sell. Before considering putting a "for sale" sign in your yard, make sure you are truly ready to say goodbye to your abode.
- Is it a good time to sell? Make sure you've done your
homework to learn more
about the local real estate market, including understanding what's
so you set a competitive — yet realistic — price. Since every market is
different, it's important to find
a good real estate agent to offer
If you decide it is not the right time to sell, you could always opt for renovating your current property. This may increase your home's worth for the future. WaFd Bank offers a home equity line of credit (HELOC). A HELOC is a loan that uses your home's equity — the difference between what you owe on your home and what your home is currently worth — to help you pay for home improvement projects.
- Do you have enough equity in your home to afford all of your closing costs and more? If you are looking to sell — and potentially buy (and afford) another home — figure out whether you would make enough money off the sale to cover any repairs and the real estate agent's commission to sell the house. You may also need money for the down payment on a new home.
- Can you afford what's next?
Selling while prices are high means you will also have to buy while prices are high (if you decide to buy again), or afford current rental prices.
When buying a home, you will likely have to pay about 3 to 4 percent of the cost of the home in closing costs. Closing costs may vary based on your lender and the location of the home.
Before putting your home on the market, crunch the numbers to see whether you can afford to buy another property. You will want to review your finances to determine what size loan you may be able to qualify for and how much you can safely spend on a mortgage each month.
WaFd Bank offers a free online app-based budgeting tool where you can track your spending. This may be a helpful tool if you need to tighten your budget to bring costs down if saving up for a new house.
Need help managing your money or applying for a home loan?
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