When is the Right Time to Make a Move?

Happy Holidays! As another year winds down, we all look to the new year as a time of renewal. Some will make new resolutions. Some will set new goals. Some will even consider buying their first home, upgrading or downsizing. Coming out of several years of rising home prices, low inventory and a roller coaster of mortgage interest rates, it’s no wonder the question on everyone’s mind is, “When is the right time to make a move?”

As a real estate agent, I am asked this question all the time. And my answer is always the same: “When the time is right for you.” But I know that is not enough; the consumer wants professional guidance and data. Everyone wants to make an educated decision and a wise investment. Everyone wants to make the very best decision for themselves. Guiding the consumer towards attaining all these goals is a tremendous responsibility for the real estate professional and one that I take incredibly seriously. Although I have more than twenty years’ experience and great instincts, I do not have a crystal ball. That’s why I know it is my obligation to the consumer to analyze data and trends. It is my obligation to know what is going on with the economy and in government….and to know what impact they may have on the real estate market.

Knowing very well that I cannot possibly have all the answers, I also consider the opinions and predictions of the industry experts. During the recent annual convention of the National Association of Realtors® (NAR) in Boston, Chief Economist Lawrence Yun told the thousands of real estate professionals in attendance that he predicts that mortgage rates will stabilize and remain right around 6%, possibly a little lower, throughout 2025 and 2026. Yun is usually pretty accurate.

Yun went on to say, “With a large budget deficit, there’s less mortgage money available. The government is borrowing so much of its money. A large budget deficit will prevent mortgage rates from going down to 4%”.

Factors that could change Yun’s forecast: a reduction in the budget deficit, an easing of housing regulations that are holding up home builders, or a significant increase in the labor force to help lower inflationary pressures. In such cases, “mortgage rates could come down quickly,” Yun noted. Nevertheless, the “locked-in” effect of homeowners feeling stuck-in-place with 2% or 3% mortgage rates from recent years will lessen over time as consumers realize the new rates are here to stay.

Also in attendance at the NAR conference was NAR President Kevin Sears. During his interview with co-host “unfiltered” podcasters James Dwiggins and Keith Robinson, Sears was asked if he thought the days of 3% or 4% mortgage interest rates were gone. “Yeah, but it’s also convincing those homeowners that maybe have been in the house for five to ten years. Yeah, you are going to get an interest rate that’s going to be a couple points higher. But think about the equity that you built up. And you know what? You can put down a bigger down payment, have a smaller loan and maybe keep the same payment.”

On the topic of equity, Yun pointed out, “A typical homeowner has accumulated $147,000 in housing wealth just over the last five years, according to NAR’s research. As a result, the spread in median net worth between homeowners and renters continues to grow. It stands at $415,000 for homeowners versus $10,000 for renters”.

Clearly, buying and selling a home is a major life decision. The best advice I can offer to any consumer is to establish goals. Discuss those goals with an experienced and educated real estate professional and then implement the steps and strategies to attain those goals. Quality of life is far more important than a number. Your time may be now.