Capital InsightsFinancial Planning

‘Tis the Season…to hold off on buying or selling a home?

Inflation. It’s a trigger word for all of us heading into this holiday season. As if the crunch before year-end didn’t already fill many with a sense of dread rather than cheer, considering buying or selling a home right now carries an additional layer of insecurity. With this in mind, let’s take a look at pressing considerations on both sides of the transaction.

On the Buying Side:

Those who need a new home—whether due to a growing family, increased work from home policies, or a move to a different area—may be motivated to rent rather than buy. Elevated mortgage interest rates have suppressed demand, as the 20-year highs above 7% in October and November are difficult to swallow when rates under 3% were available less than a year ago. Meanwhile, though housing prices have dipped from their COVID-driven peaks, costs are still higher from a lack of supply and have not reduced as much as would be expected relative to the interest rates available to buyers. Unfortunately, even if a buyer is in a position to be flexible with their timing and hold off on purchasing, current uncertainty as to when inflation may cool means that there’s no guarantee of a significant improvement in interest rates or overall housing prices waiting for them in 2023.

On the Selling Side:

Current homeowners without an immediate, pressing need to sell may be choosing to stay put a bit longer in an attempt to ride out the current fluctuations. The majority of current mortgages have rates below 4%, making a swap for a new mortgage above 6% particularly unappealing. Additionally, sellers may be disappointed to find that they likely will not receive the same number of competitive offers that they could’ve expected a year ago. Buyers are painfully aware how quickly the increased interest rates will balloon their monthly mortgage payments. While the market is still stacked slightly in the seller’s favor due to low supply, first-time buyers who came of age during the 2007 subprime crisis are more cautious about signing up for a mortgage that could put them at risk of being underwater on their home should the value continue to slide in the coming year.


So, where do these circumstances leave you – a buyer or seller with a life event that’s forcing a housing change in a less-than-ideal time? Everyone’s situation will have unique nuances that will require intentional thought regarding what factors they are willing to compromise on. It’s easy to get trapped in a cycle of wishing you’d been able to make the perfect move at the perfect time, but the truth is that ideal window only becomes clear in hindsight. As with any investment, attempts to time the market are educated guesses at best. Instead, focusing your energy on the variables within your control is much more likely to produce an outcome in which you feel secure.


Feeling doubtful about what the next right step is for you? Reach out to us to discuss your housing needs and how they factor into your overall financial picture at any stage of life.