In both cases, the answer is the same: The best time was yesterday. The next best time is today. Here’s why.
For the sale of your home, the increase means that buyers without a formal mortgage pre-approval will qualify for a smaller mortgage today compared to yesterday. This may mean they will offer a lower price today compared to yesterday. Some buyers will also decide to stop looking to buy because of the rate increases. Generally, it is reasonable to expect fewer interested buyers for your home.
Also, keep in mind that buyers that had a formal pre-approval in place for a fixed rate before the interest rate increase are inclined to buy soon. Pre-approvals often expire within a period of 90 to 120 days. This is another reason why selling sooner rather than later is best.
For the purchase of your new home, the increase means that if you did not have a pre-approval, today you can get a lower mortgage compared to before the increase. If you have pre-approval for a fixed rate, you are on a time crunch. When it expires you will probably have to requalify for a higher mortgage rate and for a lower amount. Also, keep in mind that the last time real estate prices showed any signs of decline, the market supply almost dried up. So buying sooner rather than later is for your benefit.
The other key question is do you buy first and sell later or sell first and then buy later? In a changing environment, the safest option is to sell first. Since then you know exactly how much you have available as part of your downpayment. Then you can define the exact budget for your purchase. If you buy first and then do not sell for the price you expected, then you can find yourself in a difficult position.
Certainly, the worry in the sell first, buy second choice is: “What if we sell and then can not find something we like to buy?” This can be addressed by doing some research to see what is available on the market before putting your home on the market. As professional Realtors, we do this for every family we serve in this journey. And the choice is yours. Always.
Remember to always Say NAI (Yes) to Life