Should I Sell My House Now or Wait Until 2026?

Are you're wondering, should I sell my house now or wait until 2026? It's a question on a lot of homeowners' minds, and honestly, there's no crystal ball to give a perfect answer. But, based on what I'm seeing from the data, waiting until 2026 might not be the game-changer you're hoping for. The housing market is complex, and while there might be some positive shifts, we're not expecting any dramatic turnarounds. Let's break down what's going on and see if we can find the best path for you.

Should I Sell My House Now or Wait Until 2026?

We've all seen how crazy the housing market has been lately. It feels like a rollercoaster, with prices going up and down, and mortgage rates constantly changing. Trying to figure out the perfect time to sell is like trying to catch a greased pig – it’s slippery!

As someone who keeps a close watch on these things, I can tell you, the housing market is in a bit of a weird place. It's not in a full-blown crisis, but it's not exactly booming either. You might've heard some talk about a “lock-in effect,” which is making people think twice about selling, and that's what we're going to unpack today.

The Current Housing Market: A Snapshot

First, let's get real about where things stand right now. According to the folks at Realtor.com, who are some of the best in the business for housing data, the end of 2024 wasn't exactly a party for sellers. Homes were sitting on the market for around 70 days, and that's a big jump compared to just a month before. Plus, there were fewer houses to choose from—inventory had dropped significantly. It was the slowest festive season in five years for real estate.

Then there are the mortgage rates. They've been a bit of a wild card, bouncing up to a six-month high at nearly 7% recently, and the experts expect them to stick around 6% range through 2025, with a possible 6.2% by the end of 2024. This impacts both buyers and sellers and brings us to that sticky “lock-in effect.”

The Mortgage Rate “Lock-In” Effect

This is something I’ve been watching with concern. Many of us who own homes got really sweet mortgage rates a couple of years ago – some are even below 4%! Now, if those homeowners were to sell, they'd be facing much higher rates on a new loan. It's like being cozy in a warm blanket and not wanting to get up in the cold. This is why many sellers are choosing to stay put.

The Consumer Financial Protection Bureau did a study and found that around 60% of mortgages had interest rates below 4%. Can you imagine how reluctant those homeowners are to move? It’s a valid point, why would you move and face higher mortgage rates? This reluctance, according to Realtor.com Chief Economist Danielle Hale, is expected to impact the market through 2025.

What to Expect in 2025 if You Want to Sell Your House?

Now, let's get to the heart of the matter. What can you expect if you’re considering selling in 2025?

• Slow Start: The beginning of 2025 is likely to be slow. The “lock-in effect” will still be strong, meaning fewer houses on the market.
• Spring Boost: But, according to Hale, as we move towards spring, we might see a bit of a bump in inventory. People can only hold off for so long. Life events happen, and sometimes you just have to move, regardless of interest rates. We could see even more homes available throughout the summer.
• Mortgage Rates: Don’t get your hopes too high about mortgage rates. Realtor.com projects them to average around 6.3% through 2025, ending around 6.2% by the end of 2024. We're not looking at those super low pandemic-era rates anytime soon.
• Home Prices: Here’s an important point: Home prices are still expected to rise in 2025, at about 3.7%. While the median home price dipped slightly at the end of 2024, the price per square foot increased. This suggests the growth of the stock of smaller, cheaper homes.
  • Even with more inventory, prices are going up due to strong demand, combined with a decade of low building activity in the country. There is a real shortage of homes in the US; Realtor.com estimates a shortage of 7.2 million homes in 2023.

The Buyer Profile: Older and Wealthier

One trend that's interesting to note is who's buying houses these days. The National Association of Realtors® 2024 report says the average homebuyer is older and richer than in the past.

• Age: The median age of homebuyers is 56! That’s an increase of 7 years since 2023.
• First-Time Buyers: Only 24% of buyers last year were first-time homebuyers, which is a record low.

This trend could be due to the high cost of homes – median listing prices are 68% higher than November 2019! This makes it harder for younger, first-time buyers to jump in, and the trend is likely to continue through 2025. It’s unfortunate, but that’s the way things stand right now.

The “Trump Bump” Effect

Now, here's a curveball – the potential “Trump bump.” With President-elect Donald Trump's second term, Realtor.com economists are looking out for possible changes in the housing market.

• Pro-Business Policies: If Trump brings back his first term policies such as tax cuts, deregulation, and pro-business policies, it could affect mortgage rates, construction, and affordability.
• Income Growth: If Trump’s policies boost the economy, we could see more income growth and potentially lower taxes. These things might make homeownership more accessible, although that’s not a given.
• Tariffs and Immigration: On the other hand, some of Trump's policies, like increased tariffs and stricter immigration, could negatively affect the construction industry, potentially raising costs. We don't really know exactly what the policies will look like in 2025.

It's a mixed bag and it's a bit of a gamble to rely on a “Trump bump.” We'll have to wait and see how things play out.

Geographic Factors: Where is the Market Strong?

Location, location, location! It's not a national thing, we have to break it down to regions and see what makes a difference for you.

• Sun Belt Boom: The Southern and Western parts of the US are still leading the market. In the Top 10 list of housing markets for 2025, you’ll see the likes of Texas, Florida, and Virginia.
• Strongest Markets: Cities like Colorado Springs (CO) with a projected increase of 27.1% year on year in home sales and Miami (FL) with a 24% increase are doing well. Virginia Beach (VA) is also experiencing positive growth at 23.4%. The image and the data show you that those are some very strong markets with high percentage increases.

If you are in one of these markets, it might be a good time to consider selling due to high demand.

So, Should You Sell Now or Wait Until 2026?

After all this, you're probably looking for a straight answer. Here's my take:

• Waiting for a Big Change in 2026 is Risky: Unless you have a specific reason for waiting (like needing to save up more), the market isn't projected to make a radical change from the forecasts we are seeing for 2025.
• Lock-in is Fading: The mortgage lock-in is slowly fading away and we can expect more inventory in the market throughout the summer of 2025.
• Prices are Rising: Despite the inventory, prices are projected to increase, so you’re not looking at any major changes in prices.
• My Opinion: If you are thinking of selling, I would say that 2025 might just be as good as 2026. We are not seeing any drastic shifts. If you live in an area with high demand, it might be a good idea to sell in 2025. In general, it is important to look at your unique situation. What is your financial goal? What is your personal preference? These questions will help in your decision-making.

A Few Final Thoughts

The housing market is a complex beast. It's influenced by all sorts of things, from mortgage rates to political events to the rate of new home construction. As I’ve shown you, the situation is not expected to change dramatically from 2025 to 2026.

I encourage you to take the information I've provided and really think about your own situation. Don't make a decision based on what you hope will happen; make a decision based on the facts and your personal goals.