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Should I Sell My House in 2022? Factors to Help You Decide

At HomeLight, our vision is a world where every real estate transaction is simple, certain, and satisfying. Therefore, we promote strict editorial integrity in each of our posts.

The recent real estate market has been head spinning, and perhaps the home that sold across the street for way over asking price has got you wondering — should I sell my house in 2022?

Maybe you now work remotely so you’re thinking about moving to have enough space for a home office. Or the idea of cashing out the equity on your two-story home and downsizing to a single-level house sounds appealing.

“When I talk to my clients, it’s really about looking at the big picture and then what’s right for them,” says Deidre Quinn, an award-winning agent in the Philadelphia area. While it’s not a good time for everyone to sell, those who decide it’s the right time can take advantage of a strong seller’s market with little inventory and high demand.

We’ve done the research and interviewed top real estate agents to help you answer this all-important question — should I sell my house in 2022?

Real estate market starts to cool off

Sales of existing homes fell for the second consecutive month by 2.7% from February 2022 to a seasonally adjusted annual rate of 5.77 million in March, down 4.5% from the previous year, according to the National Association of Realtors® (NAR). Sales dropped from March 2021 in all four major US regions. While inventory remains low there has been some recovery in early 2022. Prices in March 2022 were 15% higher than a year before for existing home sales.

Pros for selling your house in 2022

With homes still in short supply if you sell in 2022, competition among buyers could lead to a faster, more profitable sale. By waiting, you risk increasing interest rates that limit the number of qualified buyers as well as the size mortgage that lenders will approve. Read on for the reasons why 2022 might be the year to make your move.

Interest rates are on the rise and so are prices

Steadily climbing interest rates not only affect the pool of buyers you’ll attract, but how much house you can afford if you want to purchase a new property. With interest rates still relatively low, 44% of top agents predict that buyers will lock in their mortgage rates early in the year, according to HomeLight’s 2022 Housing Market Preview. If you’re planning to finance your next home, securing a lower mortgage rate now might save you money in the long run and make your house more affordable to potential buyers.

While home prices are not expected to soar at the same rate as in 2021, 84% of agents surveyed by HomeLight believe their markets will continue to be favorable for sellers throughout the year. Three-fourths of agents anticipate the low inventory that characterized the real estate market last year to continue in 2022.

Quinn says inventory is even tighter in 2022 than last year. She’s seen bidding wars across all price ranges with many homes in the Philadelphia area selling for 10% over asking price. Although she can’t predict when, she expects the real estate market to shift as interest rates rise and buying a home becomes even more expensive.

Cash offers abound

According to HomeLight’s 2022 Buyer and Seller Insights Report, nearly one-third of successful buyers paid cash. Cash offers are likely to continue this year as a proven strategy to purchase a home. With a cash buyer, there’s no worry about mortgage approval or financing contingencies delaying the sales process.

Unsure Whether to Sell Your House Now or Wait?

Start with a no-obligation cash offer from HomeLight’s Simple Sale platform. We’ll provide you with an all-cash offer to buy your home, on your timeline. No repairs, no staging, no showings — and close in as little as 10 days.

Buyer concessions offer convenience and savings

Buyers are likely to continue using tactics that worked while inventory remains tight. Among survey participants, 23% agreed to a closing timeline preferred by the seller which would be more convenient if you’re waiting to move into your new house.

Twenty-two percent of respondents didn’t request repairs by the seller. Dodging the hassle and expense of making renovations is a significant advantage if you have an older home or you’ve inherited property in another state.

Although Quinn says buyers are more likely to forgo home inspections, they are reluctant to purchase houses that need work — especially with the current challenges of finding contractors or building supplies. “The homes that buyers are going for, and we’re seeing multiple offers in many cases, are the homes that are more finished, the homes that are turnkey,” says Quinn.

Migration to suburbs keeps demand high

The timing could be right to sell if you live in the suburbs since the strong migration to suburbia in 2021 is expected to continue this year, according to 45% of agents in a HomeLight survey. Buyers are moving to the suburbs for larger houses, public green space, and amenities like pools and outdoor kitchens.

Cons for selling your house in 2022

Your motivation for selling might be more personal like needing an additional bedroom for a new baby or wanting to be closer to aging parents. Look at your financial situation to decide if selling your house is the solution or consider other alternatives such as building an addition or mother-in-law suite.

Evaluate the following factors that might delay your plans to sell in 2022.

Is your next home available and affordable?

If you’re thinking of moving, you might face the same high-priced market that has you thinking about selling your house. Before putting your home up for sale, decide where you will move and check out the area to see if your dream house is available and affordable.

Quinn helps relocating homeowners connect with an agent to learn about the market. She recommends visiting the area, getting pre-approved for a mortgage, and looking at the financial implications before listing your home.

If the pickings are slim and prices outrageous, you can wait until inventory improves or you can save money for a bigger down payment. A brand-new house is another option, but supply chain problems, labor shortages, and zoning issues are impeding construction.

Consider buying another residence first so you won’t overpay for a house that doesn’t offer much more than the one you sold except for a bigger mortgage, but you may need a different source of cash for your down payment. Ask buyers to rent back if you need more time to find the right property or rent another home until you do.

Waiting to sell if you recently refinanced

If you were among the horde of homeowners who took advantage of low interest rates by refinancing, then hold off on selling your house. Freddie Mac reports that refinancing grew in record numbers in 2020 to its highest annual total since 2003. With rates hovering around 3% for the past two years, some borrowers cashed out equity and increased their loan balance as well as refinanced multiple times. So if you recently refinanced, you might have a larger loan to pay off and less equity if you sell, plus you’d give up lower payments due to higher interest rates.

Can you make a profit?

Homeowners more than doubled their equity gain to $55,300 on average in Q4 2021 from the previous year as real estate prices went through the roof, according to CoreLogic. Determine equity and potential profit by starting with HomeLight’s Home Value Estimator for an approximation of your home’s worth. For a more accurate calculation, ask a real estate agent to provide a comparative market analysis (CMA) that evaluates your property relative to recently sold homes in your area.

In the unlikely event that your home has gone down in value or you’ve taken out a second mortgage to pay for college tuition, wait to sell if you owe more money than your sale will generate.

Consider delaying if you’ve lived in your home only a few years since most of your payment is interest with little going toward principal when you take on a mortgage so you might not have enough equity for a profitable sale.

Determine if you will recover selling costs amounting to 9%-10% of the sale price including agent commissions and closing costs. Remember to account for additional expenses such as renovations, repairs, and staging. Utilize HomeLight’s net proceeds calculator to find out how much profit you’ll make.

Don’t forget to factor in the cost of hiring movers unless you’re going to rent a truck and haul your furniture. A local move averages $1,250 while moving long distance runs nearly $5,000 for a 2-3 bedroom home.

Think about renting out your house if you need to relocate for a job and the numbers don’t add up in your favor.

Watch out for capital gains taxes

Your home might have skyrocketed in price tempting you to sell, but be wary of capital gains taxes that could eat up a huge chunk of your profit. If you lived in your home for at least two of the five years before the sale, you can exclude capital gains for your primary residence of up to $250,000 if single or $500,000 if married. Subtract deductible closing costs, selling expenses, and your tax basis in the home to calculate the gain. But don’t fret if you just moved in. You may be eligible for a partial exclusion of capital gains if you’re selling due to a job change, health reasons, divorce, or other unplanned situations. Consult a tax advisor to discuss the tax consequences of selling your home.

Strategies to sell your house if the time is right

Work with a top agent for a faster, more profitable sale

If you’ve decided you should sell your house in 2022, HomeLight can help you find an experienced agent to maximize your home’s value and sell your house faster. An agent will guide you through the sales process including pricing and marketing your home, negotiating with buyers, and connecting with contractors to make repairs and provide various services.

“Our clients are clients for life. We want to help them navigate and strategize on what’s best for them. We help them see that big picture,” says Quinn.

Connect with a Top Agent

Thinking of selling? Connect with a top agent in your area who can help sell your home faster and for more money.

Budget-friendly upgrades get your sale moving

Quinn suggests giving your home a fresh coat of paint before putting it on the market. “It’s one of the least expensive and one of the top things I recommend to my clients,” she says. Choose one neutral color so prospective buyers can envision the home with their own furnishings. Don’t forget to paint your front door to amp up curb appeal and make a great first impression.

In fact, a recent HomeLight survey found that buyers will pay 7% more for a house with great curb appeal, statistically speaking. Agents recommend investing in basic yard care costing about $340 (539% ROI) and fresh mulch for approximately $275 (536% ROI) to potentially increase resale value by almost $4,500.

Other quick and budget-friendly upgrades include painting kitchen cabinets, upgrading your mailbox, and installing a smart thermostat.

Declutter and deep clean to make your house shine

Quinn advises sellers to pack up a lot of their belongings so buyers can visualize themselves and their possessions in the house. Rooms also photograph better when they aren’t overflowing with furniture and knickknacks.

Begin decluttering by sorting through closets and cabinets. Box up what you don’t need on a daily basis and donate clothing you haven’t worn in years. Throw out expired cans or packages of food that have been hiding in the corners of your pantry. You’ll be amazed at how much extra space you have when you’re finished!

Give your house a thorough cleaning to make it sparkle. Don’t forget to wipe down light switches, door handles, and outlet covers. Take out a broom to sweep storage areas such as the attic, basement, or garage. If you’re too busy or can find a million excuses not to clean, hire a professional cleaner for an average of $120 to $235.

Go for it if selling will help achieve your goals

While escalating home prices and the fear of rising interest rates may send you rushing to pack up and sell your house, everyone’s situation is unique. You might want to take advantage of the seller’s market before it slows down, but you’ll first need to know where you’re going and whether you can find the house you want at a price you can afford.

Quinn recommends that homeowners ask themselves these questions: Why are you moving? Is moving in line with your goals and the quality of life you want to achieve?

Your responses will help determine the answer to the question “Should I sell my house in 2022?”

Header Image Source: (Breno Assis / Unsplash)