Selling a Home This Year? You Should List Soon for One Big Reason

The mortgage market is changing quickly.

Ever since mortgage rates started plunging in 2020, buyers have been clamoring to purchase homes. But rates have climbed steadily in 2022, to the point where borrowing has become a far more expensive prospect. And that's apt to cause a pullback in the housing market.

It would be one thing if home prices were sitting at more moderate levels, but that's not the situation today. Rather, home prices are still extremely inflated, only now, mortgage rates are no longer low enough to help compensate for them.

As such, Lawrence Yun, chief economist for the National Association of Realtors (NAR), now expects a decline in home sales this year to the tune of 6% to 8%. Initially, the NAR's projection was for home sales to drop 3% in 2022. But based on the way mortgage rates have been jumping, it's not surprising to see a more drastic number.

If you're looking to sell your home this year, you may want to put that listing together sooner rather than later. If mortgage rates keep climbing and buyers start to pull out of the market, you could end up getting a lot less money for your home than what you'd command now.

Don't miss the chance to sell at a premium

Today's residential real estate market continues to favor sellers in a big way. That's because housing inventory is still at a low, and that lack of competition gives sellers the option to command higher prices for their homes.

As of January, home prices were up 19% on a national level, according to CoreLogic. But that number may not hold steady. If mortgage rates keep rising, buyers looking to get a mortgage might reach the point where they have to drop out of the market due to not being able to afford a home. That could hurt sellers who wait too long to list.

To be clear, mortgage rates may not rise as quickly as they've climbed during the first three months of 2022. But it's fair to assume they will continue to go up. That's because the Federal Reserve has plans to implement several rate hikes this year. And while the Fed doesn't set consumer borrowing rates, its actions can influence them heavily.

How to get top dollar for your home

If your goal as a seller is to walk away with as large a profit as possible on your home, you should not only aim to list your property quickly, but also make sure it's as presentable as possible to buyers. That means addressing obvious repairs and fixing cosmetic issues, like chipped paint and stained carpeting, that could otherwise turn buyers away.

At the same time, it could pay to partner with an experienced real estate agent. While it's possible to sell a home without an agent, you may have a smoother experience if you enlist a professional's help. Also, a real estate agent might help you price your home just right given the state of the housing market. That alone could make paying an agent's fee more than worth it.