Read the news, and you'll hear that it's a seller's market. But is that sentiment really spot-on? According to the December 2020 Fannie Mae (OTCMKTS: FNMA) Home Purchase Sentiment Index, only 50% of respondents think it's a good time to sell a home. By contrast, 52% think it's a good time to buy.
If you own an investment property you're looking to unload, or if you're a regular homeowner wondering if it pays to sell, the reality is that now's actually a pretty decent time to list a home, even if 50% of people don't agree. Here are three reasons why.
1. Mortgage rates are super low
Mortgage rates have been sitting at or near record lows since the summer. As of Jan. 22, the average rate for a 30-year fixed loan is 2.839%. For a 15-year fixed loan, the average rate is 2.296%. These rates won't last forever, and rates have already begun to slowly but surely creep upward over the past three weeks. As such, buyers may be really eager to scoop properties off the market now -- while rates are still attractive and before they climb any higher. That means you, as a seller, stand to come out ahead.
2. There's not much competition
Your home may not be the most updated in the neighborhood, but if it's only one of several properties available in your ZIP code, there's a good chance it will sell anyway. In December 2020, housing inventory decreased 39.6% year over year on a national level. That takes a lot of pressure off of sellers to put perfect properties up on the market. It also gives you, as a seller, more negotiating power. In fact, low housing inventory has been fueling bidding wars, which can hurt buyers but work to sellers' benefit.