Should You Sell Your Home in 2021?
Last year, buyer demand increased due to record low mortgage rates. That said, because of those low mortgage rates, and fewer houses on the market, home prices went up. To put it simply, the last half of 2020 was a seller’s market. But will 2021 be the same? If you’re wondering whether it’s a good time to sell your house, keep reading.
Here we break down the reasons why you should or shouldn’t sell in 2021:
Should sell your house: Interest rates are low
Low-interest rates are great for potential buyers. They make monthly mortgages more affordable! Why is this a good thing for sellers, you ask? While interest rates are expected to remain steady in 2021, there will still be a low supply of houses on the market. This means home prices will rise and sellers will walk away with a good chunk of change.
Shouldn’t sell your house: You refinanced or you’re in forbearance
Last year featured a huge refinance boom. As interest rates dropped, homeowners took advantage and refinanced their mortgages at lower rates. If you recently refinanced your house, you’re probably in a better place to afford your current mortgage than if you were to buy something new.
According to the Mortgage Bankers Association, approximately 2.8 million homeowners are in forbearance plans. If you’re one of them, and you’re wondering if you can sell your house, we have good news.
In most cases, yes, you can! But, the money you haven’t paid will be added to your total payoff (which includes any interest you owe). If your forbearance plan is set to end and you’re still struggling, talk to your lender about an extension.
Should sell: You live in a hot area
U.S. home prices have doubled in the last decade, according to Zillow. In recent months, some cities, in particular, have experienced huge booms in home prices. For example in December 2019, the average home price in Virginia Beach was $269,948. The average home price in December 2020 was $292,500, an increase of 8% or $22,552 compared to last year.
If you live in an area where home prices are skyrocketing, (and we do) it might be a good time to sell your home.
Shouldn’t sell: Your income isn’t stable
The economy is starting to recover, but that doesn’t mean everyone’s back on track. If you’re waiting to go back to work after being furloughed, or you’re worried your employer will be making layoffs, you might be thinking it’s a good time to sell your house and purchase something cheaper.
Keep in mind though, a great deal of money goes into buying a new house (regardless of the property type). Besides a down payment, you’ll have to pay closing costs, property taxes, insurance, etc. The costs add up quickly. And if your income isn’t stable, you might struggle to make ends meet.
Instead of selling your house, talk to your lender about refinancing or entering a forbearance plan to help alleviate financial stress.