You’ve probably heard that spring or fall is the best time to list your home for sale. But with the recent changes in tax legislation and potentially rising income rates, many buyers are looking for homes to buy.
While several homeowner tax breaks still exist under newly enacted laws, there are worries that housing prices might decline over the next few months as a result. This is particularly a worry in geographic areas where prices are inflated.
Another negative thing about the new tax laws for homeowner is the state and local tax deduction. Previously, homeowners in areas with higher property taxes could deduct those bills in full. Under new tax law though, the deduction is maxed out at only $10,000, meaning that homes with higher property taxes might not be as appealing to buyers.
Many individuals looking to buy a home won’t fully grasp the consequences of some of these new tax laws. But additionally, if you previously got a huge tax break — such as a $20,000 property tax deduction — those will no longer be available under the new reformed laws. This law is specifically focused around high-property value cities like New York City and Los Angeles, but can still influence perception of the overall market.
Finance experts recommend keeping your home costs to less than 30 percent of your take home pay. If the new tax laws are making your home costs jump, consider selling while interest rates are still low for buyers.
Speaking of interest rates – industry forecasters are concerned that the national average of interest rates could rise to over 5 percent in 2018. Currently, the average mortgage rate is around 4.5 percent, which is the highest it’s been in 4 years. Mortgage rates have not peaked over 5 percent since 2011.
Another great reason to sell your home is the fact that home prices are likely at their peak. One study estimates that over the last year, home prices raised 6 percent in much of the country. This makes it a great time to potentially cash out on all that equity or refinance for a lower interest rate.
No matter your situation, several signs are pointing to this spring being a great time to sell your home. Contact the Sibbach Group for a confidential consultation If you are thinking of listing your home in this sellers-market.