I have an excuse for knowing about Gomer Pyle, Jim Nabors’ hayseed character on the 1960’s Andy Griffith show. My husband is older than me (!) and he watches re-runs on ME-TV. I bring this up because of his call to me Wednesday in his spot-on impression of Gomer’s signature adage…Sur-prise Sur-prise Sur-prise! He had just heard of The Fed’s surprise announcement that it would continue its easy money, stimulus policy to, among other things, drive down mortgage interest rates which had been moving up the last couple of months. This was indeed a surprise decision; and for the housing market it was most welcome.
While housing sales have been robust this year (in The Glen and elsewhere), there was universal concern that sales would slow and price increases would moderate as interest rates continued to climb. None of us want another housing bubble, but home values are still below pre-crash levels so all homeowners would like to see continued improvement.
What does this mean for homeowners who may want to sell their homes? Two things. One, as interest rates fall more buyers can afford your home because they will be able to secure mortgages of higher values. (Every 1% rise in interest rates reduces buying power by 11%.) Two, sellers will have to move; and they will be able to afford higher priced homes.
The bottom line is this: If you want to sell your home in this vastly improved housing market, the odds are very high that it will sell; and it is likely to sell at a decent price, certainly better than had it sold last year. The market will remain robust until about Thanksgiving, so if you want to sell this year you should get your home on the market in the next few weeks. The market will pick up again in March; and if that is a better time for you, plan to list your home in late February.