Is It A Good Time To Sell A House? When To Sell And When To Wait

Are you wondering, “Is now a good time to sell my house?” You likely envision selling it under the perfect conditions – maybe getting it done quickly and getting more than your asking price.

Homeowners may consider selling a home now rather than later this year due to affordability pressure from rising mortgage rates. Housing prices may fall later in 2024, and some potential buyers may bow out of the market. This scenario might create a perfect storm of low demand and less competition for available homes.

In short, now may be a better time to sell than later in the year. Experts generally recommend late spring and early summer as the best time to sell. But there are additional factors you should consider before you list your home or keep it off the market.

When It’s A Good Time To Sell Your House

A seller’s market occurs when supply is low and demand is high, and it’s typically a good time to sell your house. If mortgage rates are rising, you may be better off waiting or selling before they climb higher. Let's look at the indicators that suggest the conditions are ideal for selling a home.

Mortgage Rates Are Low

Low mortgage rates are beneficial when selling a home as more buyers will enter the market for a more affordable mortgage. Simply put, when market rates are lower, the less interest borrowers end up paying on their loan over time, making buying a home less expensive.

The COVID-19 pandemic is a good example of this. During March 2020, the Federal Reserve dropped the federal funds rate between 0% – 0.25%, which led to a steep drop in mortgage interest rates. In December 2020, Freddie Mac reported that the average interest rate for a 30-year fixed-rate mortgage was 2.68%. However, since July 2022, the Fed has continued to hike interest rates, which has had ripple effects on the overall market.

Market Supply Is Low

A low supply of homes can be beneficial when selling a home. Low inventory means fewer houses on the market, leading to less competition.

A noticeable market supply trend began in the early part of the pandemic when working from home became common practice, and many homeowners grew reluctant to sell their homes. Builders also reduced the number of homes they built, and lumberyards slowed the production of building materials.

Because of these factors, available homes decreased while demand increased. This phenomenon has created great opportunities for home sellers to sell faster and potentially earn more than market value.

Your Home’s Value Has Gone Up

Increasing home value can be beneficial when selling. In other words, selling your home for more than you bought it for can put even more money in your pocket.

Before deciding to sell your home, look at comparable sales (or comps) to estimate the market value of your home. Comps are recently sold homes in your area with similar characteristics, such as size, age, condition and number of rooms.

If your home has gone up in value significantly since you bought it, now might be a good time to list it for sale.

You Have A Lot Of Equity

Assess how much equity you have in your home. Equity is the difference between what your home is worth and the amount you owe on your mortgage. For example, if your house is worth $200,000 and you owe $50,000, you have $150,000 in equity.

Ideally, you would build enough equity to cover the new home’s down payment and closing costs, saving you from paying these expenses out of pocket. A down payment refers to the cash you put down when you purchase real estate. It can range from 3% – 6% of the home’s purchase price. Closing costs are the fees you pay to close on a home, such as origination and appraisal fees, title searches and taxes.

If you have enough equity to cover both your down payment and closing costs, it might be beneficial to sell your home. Otherwise, you might want to wait to grow more equity before selling.

You Want To Downsize

If your home feels too large for your needs, opting to downsize to a smaller house may be a smart move.

When you downsize, you may secure a lower mortgage payment, more affordable homeowners insurance and pay less for utilities, not to mention potentially lowering your maintenance costs and generating extra cash if you sell items you no longer need – like furniture or artwork.

You Have To Relocate To A New Home

Consider selling your home before buying a new one. Navigating a home purchase while managing a home sale can get tricky and expensive, especially if you end up paying two mortgages for a while.

How To Know When Not To Sell Your House

On the flip side, when should homeowners steer clear of selling their homes? Consider it when rates are high, market demand is low, you have low equity, there are unfinished renovations in the home or you can't afford a new home. We'll walk through these factors below.

Rates Are High

When mortgage interest rates are high, it can affect your home sale. Rising mortgage rates can dampen buyer demand, potentially forcing sellers to lower their asking price.

It takes a certain level of skill to price a home in a rising rate environment appropriately. If you must sell while rates increase, do your research and connect with an experienced real estate agent in your area.

Market Demand Is Low

It’s a buyer’s market when the number of homes exceeds the number of potential buyers. In other words, supply is surpassing demand. If you're in a buyer's market, you may find it hard to compete with other home sellers. A low-demand market may be the wrong scenario to attempt a sale.

You Have Low Equity

You have low home equity when you haven't made a lot of monthly payments on your mortgage yet or you recently used your equity for financing. If this is the case, you may not want to sell your house.

With low home equity, you’ll likely need to cover the new home’s closing costs and down payment out of pocket. You’ll also need to pay the real estate commissions at closing, which typically cost between 5% – 6% of the home sale price. The commission is typically split between your agent and the buyer’s agent.

Your House Has Unfinished Renovations

Homes with unfinished renovation projects can be harder to sell. Major projects such as a leaky roof or a cracked foundation can make selling even harder.

Double-check with your real estate agent to determine whether you have incomplete renovations that may delay or derail the home sale.

You Can’t Afford A New Home

If you can't afford the down payment or monthly payments on a new home, you may want to keep your home off the market for now. Reevaluating your budget for any missed opportunities to help you save for a down payment may be worthwhile.

Also, look into government-backed programs, such as Federal Housing Administration loans, Department of Veterans Affairs (VA) mortgages and Department of Housing and Urban Development (HUD) homes. You should also explore state and local homeownership assistance.

These programs traditionally have lower credit score and down payment requirements, lower closing costs and options for home buyers with past credit challenges.

Is Now A Good Time To Sell Your House? How To Know

So, how will you know when it's time to sell your house? Home buyers can rely on a few tried-and-true methods for pinpointing the right time to sell a home.

Consult A Real Estate Agent

A real estate agent can help you effectively market your home. Real estate agents are licensed professionals who assist buyers and sellers. REALTORS^®, who also represent buyers and sellers, are members of the National Association of REALTORS^® (NAR). Buyer's agents represent buyers, and listing agents represent sellers.

Listing agents typically offer the following services to sellers:

• Provide a professional home valuation
• Help determine the listing price based on the broader housing market
• Make suggestions for home updates
• Vet buyers
• Market the home
• Negotiate aspects of the home sale
• Prepare, submit and file documents

Determine The Best Time Of Year To Sell

If you’re wondering when is the best time to sell a house, traditionally, spring and summer are the peak seasons for home sales. In areas with four seasons, the beginning of May is generally the best time to sell a house. Homes tend to sell faster (with higher sale prices) at the end of spring and the beginning of summer.

But much of this “conventional wisdom” will depend on where you live. November and December are often the best time of year to sell a house in Florida because so many snowbirds flock there during the winter. In ski towns, the winter holidays offer an opportunity. And traditionally, the best time to sell a beach house is right before or after summer.

Ensure Selling Costs Fit In Your Budget

Expect certain expenses to pop up when selling a home. If you're not prepared, they can catch you off guard. The common costs associated with selling a house can include:

• Real estate agent commission fees: A listing agent will market your home, including a property photo shoot, arranging tours and more. You’ll likely pay 5% – 6% of the home sale price on real estate commission fees.
• Seller concessions: When you agree to seller concessions you agree to pay some of a buyer’s closing costs, such as the buyer's inspection fee or title insurance.
• Closing costs: The seller and the buyer typically pay closing costs.
• Mortgage payoff: If you have a mortgage balance, you must pay it off to sell your home.
• Capital gains tax: When you profit from an asset's sale, you may pay capital gains tax. You’ll pay tax on the home sale if you sell your home less than a year after moving in.
• Home repairs: If there are unfinished projects in the home or you just want to increase curb appeal, home repairs can help enhance a home’s attractiveness.
• Moving costs: You’ll need to budget for the cost of moving. Whether your friends and family help you or you hire professional movers, expect to cover some costs when you move.

FAQs On Knowing If Now Is A Good Time To Sell A House

Our answers to these frequently asked questions should help you decide the notorious homeowner question: Is this a good time to sell a house?

How long does it take to sell a house?

In November 2021, U.S. homes stayed on the market for an average of 22 days, according to the Ellie Mae Origination Insight Report. This number can fluctuate based on the supply and demand of the housing market, the pricing of the home or the home’s condition or location.

You should also factor in the average time it takes to close on a house, which is usually 30 – 45 days.

What’s the best month to sell a house?

May is typically the best month to sell a house, followed by April and June. According to ATTOM, studies of home sales over the past 12 years show that these 3 months offer seller premiums of 10% or more above market value.

The busiest home buying months are during spring and summer, particularly for home buyers with children who want to move into a new home before they start school.

Should I sell my house now before there’s a recession?

It can be risky to buy or sell a home during a recession. A higher unemployment rate will likely result in fewer qualified buyers on the market. Usually, the demand for home buying slows, which leads to home values decreasing – unless there’s a shortage of homes on the market.

Selling your home before a recession or waiting until the economy stabilizes may be a wise financial decision. Still, you won’t know how long you’ll have to wait until the economy recovers.

How soon can I sell my house after buying it?

You can sell your house whenever you want. But if you want to profit from owning a home, it’s best to wait at least 5 years before you list your house for sale. The longer you wait, the more equity you can build in the home, which may lead to a larger profit.

If you need to sell before 5 years, aim to sell at least 2 years after purchasing your home to avoid capital gains tax.

The Bottom Line

Consider selling when mortgage rates are low, market supply is low, your home value has gone up, you want to downsize or you have a new house ready. No matter which signal you pay attention to, the right time to sell usually has more to do with your family's needs than market conditions.