At the beginning of 2023, it was estimated that 75% of people who could afford a house three years ago could not buy a house in today's market. Home prices are lower, but mortgage rates are rising critically.
Rising interest and mortgage rates have caused some sellers to postpone selling their homes. They want to stick with their current mortgage rates instead of locking in a new mortgage while rates are higher.
How does this create stuck sellers? Keep reading to find out.
The Current Real Estate Market
Buyers and sellers need to be realistic about the current real estate market. There is a good chance sellers are going to have to sell below the list price and buyers can take more time shopping around.
Sellers are losing power because of high home prices and mortgage rates. Sellers used to have multiple offers to choose from, but that is no longer the case.
The major shift in the Missouri real estate market has caused sale prices to decrease and the number of sold homes to drop. It's taking longer to sell compared to 2022.
Some homeowners are choosing to rent out their property rather than sell it. You can use our rent vs. sell calculator to see if this is the right option for you.
Doubled Mortgage Rates
Mortgage rates have almost doubled in the past year. Most people sell their homes to buy another. Since mortgage rates are so high, some people choose to stay with their current mortgage rate and end up feeling stuck.
Homeowners are pushing off the sales of their homes because they don't want to lose their current interest rates. The people become "stuck sellers." Mortgage payments are much higher for new homes in the current market.
Most buyers are required to have high credit scores to be able to afford the high mortgage rates.
If you choose to rent out your home to avoid selling complications, hire a property management company to help.
Buyer's Market vs. Seller's Market
2023 has been a weird year for home buyers and home sellers. In recent years, it was easy to gauge whether it was a seller's or buyer's market.
It was deemed a buyer's market in September because homes stayed on the market longer and sold for lower prices.
Because of relatively high mortgage rates, the number of buyers entering the market is less than the years before. Low inventory and fewer listings prove that sellers are reluctant to put their homes on the market.
Mortgage rates are expected to stabilize after reaching a high peak in 2023. Even so, the stabilization isn't happening fast enough. This causes home prices to remain low compared to 2022.
Stuck Sellers: The Bottom Line
Homeowners are turning into stuck sellers because high mortgage rates are pushing them to hold off on the sale of their homes.
If you find yourself becoming a stuck seller, there are things you can do to fix your problem. You can rent your home instead of selling to bring in regular income to help with high interest rates.
Hiring a property management team from Hunter Property Management can help. We have more than 34 years of experience helping homeowners meet their personal goals.
Contact us today to discuss your options as a stuck seller.
