Knowing when to sell your current home and buy a better one is an inexact science at best. There are so many variables that go into a decision like this that it can seem overwhelming. Depending on when you bought your current home and how much you paid for it, now may be the right time to sell it and buy up. Here are some things to consider.
Interest rates are still low: Interest rates appear to have gone as low as they are going to go and are now starting to move up. How far up and how fast is anyone’s guess but experts are predicting that mortgage interest rates will reach 4.4% in the next twelve months. As of March 20th the 30-year mortgage interest rate was sitting at 3.78 percent. If you would like an interest rate below 4% on your next home you are likely running out of time. We have a mortgage calculator on our Search Homes for Sale page. Go there and play with the numbers. How much is the house you would like to buy? What is the mortgage payment on your current home versus the house you would like to buy? What happens if you wait a year and interest rates really do go up to 4.4 percent?
Home prices are rising: The main reason you are thinking about selling your current home to buy up is because you have equity. Especially if you bought that house in the last two or three years. The issue in this kind of real estate market is not only is the house you own rising in value but so is the one you want to buy. Are they rising in value at different rates? Maybe. Probably, but the key here is not how fast they are rising as a percent of value but how fast they are rising in dollars. A 3 percent rise in the value of your $200,000 home in NE Bend is not going to be the same as a 3 percent rise in a $400,000 Northwest Crossing home. That’s $6,000 versus $12,000. Does it make sense to wait to sell your current home so that you can maximize your equity if the house you want to buy is going to see an increase in value worth twice what your home gains?
Don’t try to time the market: Timing the market is a tricky proposition. Just ask anyone who bought a house at the peak of the market instead of selling one. Or ask a real estate investor who waited until this year to buy a house in Bend. In both cases the buyer is paying more than they would have if they had timed the market right. Even professionals are seldom able to time the market right. Look at the facts of your situation. How much equity do you have in your current home? How much cash will you need to buy the house of your dreams? Can you buy the house you want if interest rates go up?
Don’t wait for lightening to strike or all of your friends to buy a new house: Take action now to find out exactly where you stand. Find out how much your house is worth by calling a real estate agent at (541) 508-2930. Know what the balance of your mortgage is. Know what your next house looks like and how much it costs by browsing our real estate search tool. Find out how much you can borrow for your next mortgage by calling your lender. If the timing isn’t right now, what needs to change in order for you to be able to buy up?