What to do with Your House?
When I think back to some of the big financial occurrences of the past couple years, there is one historic low in particular that stands out: low interest rates. While we have been seeing a consistent decline in rates since 2018, interest rates are slowly starting to rise to curb the effects of inflation. Unfortunately in this case, what goes down must come up. Rising rates will benefit savers but creates limited opportunities for borrowers.
The change in interest rates is slow but still stir up some thoughts about what to do with your house. There’s no denying that certain markets have been sellers’ markets for a while now. The number of homes available across the country is limited which has been driving up prices and supply chain issues persist which have impeded new home construction. No one would blame you if you’re getting the itch to sell. However, selling a home is a big decision. Chances are that since you’ve been in your home you’ve become accustomed to a certain sense of security, established some roots and become part of the community. Determining what to do with your house should be based on your health, happiness in your current location and financial plan, among other things. So, make sure you do a lot of research before making this decision. Here are a few things to consider when determining what you want to do with your home.
Staying in the Neighborhood
Despite market conditions making a potentially compelling case for selling your home, you need to focus on what’s best for your situation and how a move could impact your financial plan. So, despite the noise, how much longer do you want to be in your current house? Before you start thinking about your answer, I implore you to do a little bit of soul searching to determine what you want out of your living arrangement for the next 5-20 years. Will the house accommodate the kids and grandkids when they visit? Is your social circle still relatively nearby? Only you know what makes your house a home, so make sure you’re thinking about having those criteria met over the long-term.
Where Would I Live Once I Sell?
We are currently experiencing extremely low inventory of homes for sale in most cities and this is contributing to the current sellers market. This is, in turn, causing homeowners to strongly consider selling to realize the appreciation in their home value. However, unless you plan on renting or moving to a less expensive market you will have no choice but to experience the angst of being a buyer in this seller’s market. Truly consider the impact of the subsequent purchase in a seller’s market: larger monthly mortgage payments, extremely competitive home buying experience, etc. Knowing this, moving for the sake of realizing the appreciation of your home might not be the most compelling option.
Cost of Owning
Before you figure out what you want to do with your house, you’ll need to determine what state your house is in from a financial and physical standpoint. The Advisors at TCI are here to help sort out the financial side of things. There are many great resources online that can also help but I often find that sitting down and talking to someone is the best way to get my questions answered. Nevertheless, if you’re thinking about selling, do you need to do repairs? If you’re thinking about staying, do you need to make any upgrades that could make aging in your home easier? We can help you plan out these expenses so they limit the impacts on your wallet. Furthermore, how much time are you spending on your home and are you enjoying it? If you’re not enjoying the joys of homeownership anymore, it could be a good time to think about other options that are out there. Your time during your financial freedom years is too valuable to be picking weeds or mowing the lawn. Make sure you’re spending your time doing the things you enjoy.
Determining what to do with your home is a dynamic decision based in emotion, as well as financials. Having a solid handle on the financial pieces will ensure that the emotional aspects don’t play a disproportionate role. If you go through all the various analyses and the decision is still unclear, TCI’s Advisors are here to help take the guess work out of major financial decisions.