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Welcome to the NerdWallet Smart Money podcast where we answer your real money questions.
In this week’s edition, we continue our series on managing your money in 2023 by talking about buying and selling a home.
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To understand what 2023 could bring to potential home buyers and sellers, it is helpful to think about what the housing market was like in 1981. Like today, high mortgage interest rates and limited inventory kept people from buying and listing homes.
But we have overcome the housing crisis of the 80s, and there are signs that some of our current problems are easing. The Federal Reserve has hinted that there will be more rate hikes in 2023, but at a less aggressive pace than we saw in 2022. While there is still a shortage of affordable housing, we may see lower mortgage rates this year.
Interest rate negotiation is a strategy buyers can use to lower their interest rate. Foreclosure rates reduce your mortgage payment by temporarily lowering your interest rate; the difference between the actual rate and the redemption rate is usually paid by the seller.
A buyout at a reduced rate is also beneficial to the seller because it can help them take their home off the market. Preparing a home for occupancy and a reasonable price can also shorten the time between listing and closing.
- Buying and selling is getting more difficult this year. More houses have come on the market, but they are taking longer to sell as higher interest rates reduce demand.
- Sellers, get to work. To sell your home this year, get it ready to move in, set a reasonable price, and be patient because it may take longer to sell.
- Buyers, consider lowering your rate. This can be a useful way to close a deal with a seller who doesn’t want to cut the price.
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