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Tag: selling a home

  • What to Pack First When Moving House: Your Stress-Free Guide

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    When preparing for a move, one of the most common questions homeowners ask is, “What should I pack first?” Whether you’re moving into a four-bedroom house in Phoenix, AZ, or a two-bedroom bungalow-style home in Birmingham, AL, organization is the key to streamlining your entire move. This guide outlines exactly what to pack first when moving house, why the sequence matters, and how to start packing efficiently while keeping your essential items accessible.

    Start by packing items you don’t use every day

    The most effective packing strategy is to begin with everything that is not essential to your daily life. Think about the items you will not need or miss before moving day. This will help  you make steady progress without affecting your daily routines or creating avoidable inconvenience.

    1. Pack storage areas and long-term items first

    Storage spaces are full of things that are rarely used, making them the ideal starting point. Because these areas hold items intended for occasional or seasonal use, you can box them early without impacting your routine.

    Items typically found in storage

    • Seasonal clothing and accessories
    • Holiday decorations
    • Sports equipment, camping gear, or hobby supplies
    • Old paperwork and sentimental keepsakes
    • Tools or repair items not used regularly or essential to your move

    Packing storage areas first creates immediate progress and opens up physical space for staging other boxes.

    2. Pack home decor and ornamental nonessentials

    Once storage spaces are complete, turn to decorative items. Target the things that personalize your home but don’t contribute to its function.

    Examples of decorative items to pack early:

    • Wall art, framed prints, and photographs
    • Vases, candles, and decorative ceramics
    • Throw pillows, blankets, and accents
    • Small collectibles and display pieces

    Removing décor early also helps your home feel more neutral, which can be helpful if you are preparing for showings during a home sale. It may also make the emotional transition of leaving a home easier by simplifying your space gradually.

    3. Pack books, hobby gear, and entertainment

    Books, entertainment materials, and hobby supplies are among the least essential items during the weeks leading up to a move. Packing these early helps clear shelving and reduces visual clutter.

    Pack items like:

    • Books, magazines, and photo albums
    • Board games and puzzles
    • Video games and gaming systems
    • Crafts, sewing materials, and art supplies

    Because these items can be heavy, distribute them into smaller boxes to prevent overpacking and reduce risk of injury.

    4. Pack extra linens, spare bedding, and additional towels

    Most households keep more linens than they use regularly. Packing extra sets early reduces clutter and the number of last-minute items to handle.

    Ideal items to pack early:

    • Guest sheets and rarely used linens
    • Spare blankets or comforters
    • Extra towel sets

    Keeping only one active set of linens and towels per person makes the final days before moving more manageable.

    5. Pack nonessential kitchen items

    While the kitchen is often the last room you want to pack up, certain items can be boxed several weeks in advance. Focus on pieces that do not support day-to-day food prep.

    Nonessential kitchen items to pack first:

    • Serveware and platters
    • Specialty bakeware
    • Small appliances (waffle maker, slow cooker, toaster oven)
    • Extra dishware, duplicate utensils, or glassware

    6. Pack off-season clothing and accessories

    Clothing that does not apply to the current season is an easy one to check off the list. 

    What to include:

    • Heavy coats during a spring or summer move
    • Shorts, swimwear, or sundresses during a fall or winter move
    • Seasonal footwear
    • Holiday attire and formalwear

    Packing off-season clothing early frees up closet space and makes the final packing stretch less overwhelming.

    7. Pack guest rooms and low-use areas

    Guest rooms, spare bedrooms, and other low-traffic areas tend to contain items that are not part of daily living. They also make excellent spaces to store packed boxes once emptied.

    Items found in low-use spaces:

    • Guest bedding and décor
    • Guest room accessories and small furniture

    Completing these areas early helps you maintain order throughout the move.

    Why this packing order works

    Following this sequence allows you to:

    • Maintain access to essential items as long as possible
    • Build early packing momentum without disrupting daily routines
    • Reduce stress by handling the simplest and least sentimental categories first
    • Shrink the workload for the final week before moving

    By the time you’re ready to pack essentials, most of the work will already be done – without sacrificing your daily comfort.

    Frequently asked questions on what to pack first when moving house

    When should I start packing nonessential items?

    Start packing for your move four to six weeks before moving day. This timeline allows you to complete nonessential categories and avoid packing up the rest of your house in a hurry.

    How do I know what counts as “nonessential”?

    Any item not required for day-to-day living qualifies. If you don’t use it weekly or won’t need it before the move, it can be packed early.

    Why start in storage areas instead of main living spaces?

    Storage holds the least frequently used items and is isolated from your daily functions, making it the most efficient starting point.

    Can I pack the kitchen early?

    Yes, but only nonessential items. Everyday cookware, dishes, and utensils should remain out until the last few days.

    Do I need to follow this exact order?

    Not strictly, but using this order as a guideline helps you avoid packing important items too early and keeps the process organized.

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    Carson Sperry

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  • Moving With Pets: What You Should Know for a Smooth Transition

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    Whether you’re moving to a small apartment in Santa Monica, CA, or a four-bedroom house in Buffalo, NY, moving is a big disruption for everyone in your household, especially pets. Dogs and cats thrive on routine, and a new home comes with unfamiliar smells, sounds, and layouts. With a little planning and patience, you can make the move safer and less stressful for your pets – and for you.

    Below are the key considerations to take into account before moving with pets and the steps you need to take to ease the stress of the transition on you and your four-legged friends.

    Plan your pet move early

    Pets pick up on changes long before moving day.

    In the weeks before your move:

    • Schedule a vet visit. Make sure vaccines are up to date and ask for copies of medical records. If you’re moving far, request recommendations for a new vet.
    • Update ID and microchip info. You want your new address tied to your pet’s tag and microchip before the move.
    • Re-stock comfort essentials. Have favorite food, treats, medications, calming aids, and a familiar blanket ready.
    • Practice with carriers or crates. Leave the carrier or crate you plan to use in the move out in the open with treats inside so they feel safe, and don’t associate it with stress.
    • Look into pet rules at your new home. HOA or rental policies, weight limits, pet deposits, breed restrictions, and leash rules are all worth knowing upfront.

    A little prep now can prevent frantic last-minute scrambling later.

    Minimize stress before moving day

    Like people, pets have strong emotions. Boxes piling up, furniture shifting, and your own stress levels can all raise their anxiety. By starting the packing process early you can introduce changes gradually instead of all at once. The goal is to keep your pet’s world predictable while everything else shifts.

    Try these calming strategies:

    • Stick to normal feeding and walk schedules.
    • Keep their sleeping area intact until close to moving day.
    • Use familiar scents (their bed, toys, or an unwashed shirt of yours).
    • Set up a “pet-safe room” early so it doesn’t feel new on moving day.

    If your pet is especially anxious or has a history of motion sickness, ask your vet about safe anti-anxiety or anti-nausea options.

    Moving day: Create a safe zone

    Moving day is often noisy, chaotic, and full of open doors. This all combines to create a perfect storm for a scared pet to bolt. Your best move is to keep them separated from the action.

    Set up a pet-safe room:

    • Choose a quiet room with a door that closes and add:
      • food and water
      • litter box (cats)
      • bed or crate
      • a few favorite toys
      • something that smells like home
    • Put a sign on the door that says something like, “Pet inside. Please keep the door closed.”

    Other moving-day options:

    • Have a trusted friend or family member pet-sit.
    • Book a daycare stay or overnight boarding.

    Keeping pets out of the chaos keeps them safer and makes your move faster.

    Car travel tips for dogs and cats

    Whether you’re moving 20 minutes away or embarking on a 20 hour-drive, safety and comfort come first.

    Before hitting the road:

    • Don’t feed a full meal right before leaving. This helps prevent nausea.
    • Take a long walk and have a play session to burn off extra energy.
    • Pack a pet go-bag:
      • Food, treats, medications
      • Collapsible bowls
      • Waste bags and/or litter supplies
      • Towel and pet wipes
      • Leash and harness
      • Veterinary records

    On the drive:

    • Secure your pet. Use a crash-tested harness, travel crate, or carrier. Loose pets can be injured or cause accidents.
    • Offer water at stops and plan regular break times.
    • Keep the car cool and ventilated.
    • Never leave pets alone in a parked car.

    For cats: a carrier is non-negotiable. Add a comfy towel inside and keep it covered with a light blanket to reduce stimulation.

    Flying with pets

    Long-distance moves and air travel add extra variables, so check requirements before booking your tickets.

    Key steps:

    • Confirm airline rules for:
      • in-cabin vs. cargo travel
      • carrier sizes
      • breed restrictions
      • health certificates
    • Book a direct flight if possible.
    • Label carriers with your contact info and “Live Animal” stickers.
    • Avoid sedation unless your vet specifically recommends it.

    If your pet is older, snub-nosed, or medically fragile, ask your vet if flying is safe at all. Sometimes driving, even though it may take longer, may be the better choice.

    Help pets adjust after you arrive

    Your pet may be excited or deeply suspicious. Both are normal. The goal is to keep the first few days low-pressure and routine-heavy.

    First-day priorities:

    • Set up their stuff before you tackle yours. Prioritize:
      • Bed and crate
      • food and water station
      • litter box or pee pads
      • Toys
    • Introduce rooms gradually.
    • Keep doors and windows secured.

    For dogs: take them on a leashed tour of the house, your yard, and the neighborhood.

    For cats: start with one room and slowly expand access over the next few days.

    Don’t be surprised by some minor behavioral changes at the beginning. Things like hiding, clinginess, pacing, or accidents are to be expected. That said, most pets stabilize once they learn the new routine and settle in.

    Don’t forget the neighborhood factor

    A move doesn’t stop at your front door. The neighborhood can shape your pet’s daily life.

    Check out:

    • Nearest vet and emergency animal hospital
    • Walking routes and sidewalk safety
    • Dog parks or pet-friendly green spaces
    • Local leash laws and pet licensing rules
    • Noise levels (busy streets, trains, nightlife)

    A great home for you should be a great home for your pets, too.

    Short guides for other pets

    Moving with reptiles

    Reptiles are sensitive to temperature swings and vibration, so stability is everything.

    Quick tips for moving with reptiles:

    • Transport reptiles in a secure, ventilated container with a soft lining.
    • Keep reptiles warm but not overheated. Consider using heat packs on the outside of the container.
    • Minimize handling and movement.
    • Set up their enclosure first at the new home so they can return to a stable environment quickly.

    Moving with fish

    Aquariums are tricky because water quality and oxygen matter more than you’d think.

    Quick tips for moving with fish:

    • Move fish in sealed bags or lidded containers with original tank water.
    • Keep them in a temperature-stable cooler.
    • Transport filters and beneficial bacteria wet (do not let them dry out).
    • Recycle the tank slowly after arrival to avoid shocking fish.

    Moving with birds

    Birds can stress easily from noise and drafts, and some species are very bonded to their cage routine.

    Quick tips for moving with birds:

    • Use a travel cage or secure their normal cage to ensure it stays closed throughout the move.
    • Cover the cage with a light blanket or towel to reduce stimulation.
    • Keep them away from A/C vents or open windows while you travel.
    • Set up a quiet, familiar corner at the new home before letting them out.

    Frequently asked questions on moving with pets

    How long does it take pets to adjust after a move?

    Most dogs adapt within a few days to a couple weeks. Cats often take longer, especially if they’re skittish or very territory-oriented. Instilling a normal routine quickly can help speed things up.

    Should I change my pet’s food during a move?

    Try not to. Keeping their diet the same reduces stomach issues during an already stressful time. If you must switch brands, do it gradually once they’re settled.

    What if my pet refuses to eat right after we move?

    A short appetite dip can be normal. Offer food at regular times, keep the environment calm, and avoid too many new treats. If they won’t eat for more than 24 hours (especially cats), call your vet.

    How can I stop my cat from hiding all day in the new house?

    Let your cat(s) hide at first. This is a safety behavior. Keep them in one quiet room with essentials, sit nearby calmly, and let curiosity do the work. Don’t force them out.

    Is sedation safe for travel?

    Only under direct veterinary guidance. Sedation can cause breathing or balance issues, especially during flights. Many vets prefer milder calming options instead.

    What’s the safest way to introduce my dog to a new neighborhood?

    Start slow and on-leash. Walk familiar-length routes at quiet times of day, reinforce with treats, and keep the first few outings calm and positive.

    How do I handle multiple pets during a move?

    Separate safe rooms or crates are best on moving day. At the new home, introduce space gradually and keep resources (food, water, litter boxes) plentiful to avoid tension.

    Should I board my pet during the move?

    If your pet gets overwhelmed by strangers, loud sounds, or open doors, boarding or daycare can be a great choice. If boarding adds stress, a trusted in-home sitter might be your best option.

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    Carson Sperry

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  • When Does the Seller Get Money After Closing? What to Expect and How Long It Takes

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    Quick answer: Most sellers receive their money within 24–48 hours after closing, though timing can vary depending on:
    – The type of closing: Wet closings may allow same-day payment, while dry closings can take several business days.
    – How the seller is paid: Wire transfers are typically faster than cashier’s checks, though bank processing timelines apply.
    – Recording and banking requirements: Deed recording, cut-off times, weekends, and holidays can all affect when funds are released.

    Selling a home is a major financial milestone, and one of the first questions sellers ask is when does the seller get money after closing? In most cases, sellers receive their proceeds within 24 to 48 hours, though some transactions pay out the same day while others take several business days.

    Whether you’re selling a home in Kansas City, MO, Portland, OR, or Los Angeles, CA, understanding how and when you’ll receive your funds can help you plan your next move with confidence. In this Redfin guide, we’ll explain when sellers get paid after closing, how wire transfers work, what can delay payment, and what to expect along the way.

    What happens between accepting an offer and getting paid

    After accepting an offer, several required steps must be completed before a seller can receive their money. This process typically takes 30 to 60 days and explains why payment usually happens shortly after closing, not immediately.

    Before funds can be released:

    • The buyer completes inspections, appraisal, title work, and secures final loan approval.
    • The seller signs closing documents and ownership officially transfers once the deed is recorded.
    • The escrow or closing agent confirms the buyer’s funds have cleared.
    • The seller’s mortgage, commissions, and closing costs are paid.

    When sellers typically get paid after closing

    Once the transaction is finalized, sellers are usually paid shortly after closing. The exact timing depends on how the sale is completed and how funds are processed.

    The timeline below shows when sellers typically receive their proceeds across common closing scenarios.

    Closing scenario

    When seller typically gets paid

    Wet closing + wire transfer

    Same day or within 24 hours

    Wet closing + cashier’s check

    1–3 business days

    Dry closing

    2–5 business days

    Wire sent after bank cut-off time

    Next business day

    Weekend or holiday closing

    1–3 additional business days

    Because these steps can take time to process, sellers are generally paid after closing rather than at the signing table. It’s best to wait until funds are deposited before making major purchases or scheduling another home closing.

    How long does a wire transfer take after closing?

    A wire transfer after closing typically takes the same day to 48 hours, depending on bank processing times and when the transfer is initiated.

    In many transactions, funds move in two steps:

    • The buyer’s lender wires funds to the escrow account.
    • Escrow wires the seller’s proceeds to the seller’s bank.

    Several factors can affect wire transfer timing:

    • Bank cut-off times (often between 2–4 p.m.)
    • Whether the transfer is domestic or international.
    • Weekends and federal holidays.
    • Additional security verification by the bank.

    Wire transfer vs. cashier’s check: which is faster?

    Sellers are typically paid by either wire transfer or cashier’s check, and the method chosen can affect how quickly funds become available after closing.

    Wire transfer

    • Usually the fastest option.
    • Funds often available the same day or next business day.
    • Requires careful verification to avoid wire fraud.

    Cashier’s check

    • Must be deposited and cleared.
    • Banks may hold funds for up to seven business days.
    • Often considered safer due to fraud concerns.

    How wet and dry closings affect seller payment

    The terms “wet” and “dry” closing describe when funds are released relative to document signing, which can influence whether a seller is paid the same day or several days later.

    Wet closing

    • Funds are released immediately after documents are signed.
    • Sellers may get paid the same day.
    • Required in most states.

    Dry closing

    • Documents are signed first.
    • Funds are released days later.
    • Requires agreement from all parties.

    Dry closings are allowed in the following states, where payment typically takes 2–5 business days:

    While most sellers are paid shortly after closing, delays can occur in certain situations. These delays are typically administrative and temporary, and often relate to processing or verification requirements.

    Common reasons include:

    • Deed recording delays at the county level.
    • Buyer’s lender funding delays.
    • Outstanding liens or payoff verification.
    • Wire transfer initiated after a bank’s cut-off time.
    • Weekend or holiday closures.
    • Dry closing agreements.

    What if the buyer’s funds don’t clear?

    It’s rare for a buyer’s funds not to clear, but delays can occasionally occur due to financing, lender, or banking issues.

    When this happens:

    • The escrow officer notifies all parties.
    • Funds are not released until the issue is resolved.
    • Seller protections outlined in the contract typically apply.

    The bottom line: when does the seller get money after closing?

    Most sellers receive their money within 24 to 48 hours after closing, though the exact timing depends on the closing type, payment method, and bank processing rules. Understanding how wire transfers work and planning for possible delays can help ensure a smoother, more predictable payout. With the right preparation, you’ll know what to expect and be ready to move forward confidently after your home sale.

    FAQs: How long does a wire transfer take after closing?

    1. Do sellers get paid the same day as closing?

    In some cases, yes – especially with wet closings and early wire transfers. Most sellers, however, are paid within 24 to 48 hours.

    2. How long does a wire transfer take after closing?

    Wire transfers typically take the same day to 48 hours, depending on bank cut-off times and holidays.

    3. Can a seller get paid before the deed is recorded?

    Usually not. Most states require the deed to be recorded before funds are released.

    4. What’s the fastest way for a seller to get paid?

    A wire transfer initiated before the bank’s cut-off time in a wet closing state is usually the fastest.

    5. Do weekends and holidays delay payment?

    Yes. Banks and county offices are often closed, which can delay fund disbursement.

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    Emily Pascale

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  • Home sales and the government shutdown: What buyers and sellers need to know – WTOP News

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    As the federal government shutdown drags on, Maryland Realtors warns of growing uncertainty in the housing market. From delays in flood insurance to paused USDA loans, buyers and sellers alike could face challenges.

    The longer the government shutdown continues, the more uncertainty could be injected into the process of buying or selling a home.

    That’s according to Denise Lewis, president of Maryland Realtors, a nonprofit association representing more than 25,000 realtors statewide.

    “I think this is going to affect buyers and sellers equally,” Lewis told WTOP.

    Despite concerns about what could happen if the shutdown drags on for a month or longer, Lewis said, “Nothing is coming to a screeching halt.”

    The first place that buyers and sellers may feel the impact of the federal shutdown is in the process of getting flood insurance, Lewis said.

    “The National Flood Insurance Program can’t issue new or renewal policies during the shutdown,” Lewis said.

    However, Lewis said, there’s no need to panic. Realtors are learning about possible workarounds.

    “We’re contacting insurance companies and finding out how to get the private insurance,” Lewis said.

    There’s another possibility: “Existing policies that are backed by the National Flood Insurance Program can be transferred to the buyer,” she said, but there are some exceptions.

    “We’re finding out that it can’t be transferred if it’s in that renewal — like that 30-day, 60-day renewal period,” she said.

    Some federal loan programs are affected, including USDA loans, which, Lewis said, “are largely paused.”

    “You can certainly identify that that’s the program you want to use, and probably get your loan officer to give you numbers on what that looks like, but they’re not generating any new USDA loans — or closing them right now — until the shutdown ends,” Lewis said.

    The Department of Veterans Affairs will continue to guarantee home loans during the shutdown, but according to Maryland Realtors, staffing reductions could delay the processing of those loans. That includes appraisals, approvals and issuing certificates of eligibility.

    According to Maryland Realtors, if the shutdown lasts for a month, there could be a backlog in loan approvals and the issuance of flood insurance, for example.

    If the shutdown continues beyond one month, the National Flood Insurance Program funding could run out, and that could delay claim payments. And local governments could see a drop in revenues from transfer taxes and recordation fees. According to Lewis, rural and coastal communities could see the greatest impact.

    Lewis said the most important thing to do for anyone contemplating — or in the process of selling or buying a home — is to get informed.

    “Talk to your realtor. … And find out if there’s anything coming down the pike that could affect you,” she said.

    Get breaking news and daily headlines delivered to your email inbox by signing up here.

    © 2025 WTOP. All Rights Reserved. This website is not intended for users located within the European Economic Area.

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    Kate Ryan

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  • Can I Sell My House While in Forbearance? Everything You Need to Know

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    Key Takeaways

    • You can sell your house during forbearance. However, you are still responsible for repaying your home loan.
    • If the value of your home is greater than the amount you owe on the loan, you can sell your home and use the profits to cover the payments you missed while in forbearance.
    • Refinance your mortgage: You may be able to get a lower mortgage rate or lower monthly payment if you refinance your mortgage.
    • While foreclosure is involuntary for the former homeowner, forbearance is a voluntary agreement between the homeowner and the mortgage servicer.

    For those facing financial hardship, mortgage forbearance can offer some much-needed relief. However, this relief is temporary. While looking for a more long-term solution, you may ask, “Can I sell my house while in forbearance?” 

    Thankfully, the answer, whether you’re selling a house in San Diego or a condo in Cleveland, is yes. That said, there are many factors to consider before you decide to sell. Read along to find out when selling a house while in forbearance is a good idea and when to look for alternative options.

    Can you sell your house while in forbearance?

    Yes, you can sell your house during forbearance. However, you are still responsible for repaying your home loan, so it’s important to consider all your options for lowering your mortgage payment before listing your home for sale.

    Consider your equity before selling a house while in forbearance

    Your home’s equity is one of the most important factors to consider when considering selling your home while in forbearance. If you have equity, meaning the value of your home is greater than the amount you owe on the loan, you can sell your home and use the profits to cover the payments you missed while in forbearance. If you have an underwater mortgage, meaning you owe more on the loan than the home is worth, selling your home while in forbearance will be more difficult.

    If you are underwater on your mortgage, there are two options to sell your home. Both options are preferable to the difficult foreclosure process but require approval from your lender to move forward.

    • Short sale: You could ask permission from your lender to sell the house for a lower amount than you owe on the mortgage, known as a short sale. 
    • Deed-in-lieu of foreclosure: You could also agree to a deed-in-lieu of foreclosure arrangement in which you agree to turn over your home ownership to the lender instead of going through foreclosure. 

    Pros and cons of selling a house while in forbearance

    Pros Cons
    You can avoid foreclosure. Selling does not get you out of paying your missed mortgage payments.
    You can use the profit to cover missed payments during the forbearance period. You may not be permitted to sell if your home is underwater.
    You can move to a housing situation that fits your budget. The home-selling process may take several months, during which you may have to continue forbearance and add to the amount you owe at the time of sale.

    Alternative options to selling your house while in forbearance

    • Extend mortgage forbearance: If you are still in a rough spot financially after your forbearance period expires, you can reach out to your servicer to be reviewed for an extension.
    • Refinance your mortgage: You may be able to get a lower mortgage rate or lower monthly payment if you refinance your mortgage.
    • Loan modification: This is different from refinancing. A loan modification changes the details of your current mortgage, while a refinance creates an entirely new mortgage.
    • Repayment plan: This is a plan you can work out with your lender to make up for the missed payments during forbearance. A repayment plan will involve a higher monthly payment for a certain period until you are caught up on your mortgage and can return to paying the standard rate.
    • Deferral or partial claim: Instead of repaying your missed payments over time, a deferral allows you to pay them off in a lump sum at the end of your loan or when you sell or refinance. A partial claim also enables you to make up for missed payments at the end of the loan, but you must apply for an interest-free loan from HUD.
    • Reinstatement: This is a payment to your lender for the total amount past due, bringing you back to your regularly scheduled mortgage payment plan.

    Forbearance vs foreclosure

    Mortgage forbearance is when a lender allows a homeowner facing financial hardship to pause or reduce their mortgage payments temporarily. Forbearance does not erase what you owe, and you will still be obligated to pay off your mortgage in full, but it does give you time to repair your financial footing. A typical forbearance plan lasts 3 to 6 months, during which you can rebuild your finances before returning to your regular mortgage payments.

    Mortgage foreclosure is when a lender repossesses a property and evicts the former homeowner because they could not pay their mortgage payments. Your mortgage servicer is the entity you pay your monthly mortgage payments to and may or may not be the lender you originally got the loan from.

    What to know about buying a house after forbearance

    Most importantly, forbearance will not negatively impact your credit score. If you were financially secure and held a good credit score before experiencing hardship, you could come out of forbearance with a credit score that could allow you to qualify for another loan.

    However, depending on the type of loan you had in forbearance, the timeline for applying for another loan may be delayed. For example, if you had an FHA loan under forbearance, you are not eligible for another loan to purchase a home until you have completed your forbearance payment plan and completed 3 consecutive monthly payments after the forbearance period. It is essential to do your research to determine what types of loans you will be eligible for after forbearance.

    The bottom line of selling your house while you’re in forbearance

    Selling a house while in forbearance can be a savvy financial decision, especially if you have a lot of equity built up in your house. But don’t worry if you’re not in a position to sell. Plenty of alternatives to selling can get you back on your feet and on the way to financial stability. If you’re ready to get your home on the market, connect with a real estate agent and list your home today!

    Frequently asked questions: Selling a house in forbearance

    Can I use a real estate agent, and will they understand my situation? 

    Yes, you can and should use a real estate agent. Look for an agent experienced with distressed sales or foreclosure alternatives, as they’ll better understand the additional steps involved when selling during forbearance. They can help coordinate with your servicer and ensure all parties are informed throughout the process.

     

    How long does it typically take to sell a house while in forbearance? 

    The timeline can vary, but selling during forbearance may take longer than a typical sale due to additional coordination with your loan servicer. Plan for extra time to obtain payoff statements, coordinate with your servicer, and potentially navigate any additional requirements. Starting the process early is crucial, especially if your forbearance period is ending soon.

     

    Will selling during forbearance affect my credit score? 

    The sale itself won’t negatively impact your credit, and successfully paying off your mortgage through the sale proceeds should help your credit situation. However, if you were already behind on payments before entering forbearance, those missed payments may have already affected your credit score. Completing the sale and satisfying the mortgage obligation is generally better for your credit than other alternatives like foreclosure.

     

    What documents will I need from my servicer to proceed with the sale? 

    You’ll need a current payoff statement that includes all deferred payments, interest, and fees. Request an authorization to release payoff information to your title company or attorney. You may also need a letter confirming your forbearance status and any specific requirements for the sale. Get these documents early in the process as they can take time to obtain.

     

    Can I negotiate with my servicer to reduce the amount I owe before selling? 

    In some cases, servicers may be willing to negotiate, especially if you’re facing a potential short sale situation. This could include waiving certain fees or accepting a settlement amount. However, this typically requires demonstrating financial hardship and may involve a formal loss mitigation application process.

     

    What happens if my forbearance period ends before I can complete the sale? 

    If your forbearance expires during the selling process, contact your servicer immediately to discuss options. They may extend the forbearance, offer a loan modification, or work with you on other alternatives while the sale is pending. Don’t let the forbearance lapse without communication, as this could trigger foreclosure proceedings.

     

    Are there tax implications when selling a house with deferred mortgage payments? 

    Generally, paying off deferred mortgage payments at closing doesn’t create additional tax liability – you’re simply satisfying existing debt. However, if you negotiate any debt forgiveness with your servicer, that forgiven amount might be considered taxable income. Consult with a tax professional about your specific situation, especially if you’re doing a short sale.

     

    Should I continue making payments during forbearance while trying to sell? 

    This depends on your forbearance agreement terms. Some forbearance programs pause payments entirely, while others may require partial payments. Follow your specific agreement, but consider that making payments (if you can afford them) may give you more negotiating flexibility with your servicer and could improve your overall financial position.

     

    How do I handle offers and counteroffers when the final payoff amount might change? 

    Work with your real estate agent to include contingencies in purchase contracts that account for potential changes in your payoff amount due to accruing interest and fees. Request updated payoff statements regularly, and ensure your title company or closing attorney coordinates directly with your servicer to confirm final payoff amounts before closing.

     

    If I receive multiple offers, can I choose the best one like in a normal sale? 

    Yes, you can typically choose among offers just like any other sale, but consider factors beyond just price. Cash offers or those with shorter closing periods may be advantageous since they reduce the risk of your forbearance situation changing during a lengthy closing process. Your servicer isn’t typically involved in choosing which offer to accept.

     

    Will potential buyers be concerned about purchasing a house from someone in forbearance? 

    Most buyers won’t know about your forbearance status unless you disclose it, and it shouldn’t affect their ability to purchase the home. The forbearance is tied to your mortgage, not the property itself. However, ensure you can demonstrate a clear title transfer at closing. Working with an experienced real estate agent can help address any buyer concerns professionally and accurately.

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  • What happens to a HELOC when you sell your home? | Bankrate

    What happens to a HELOC when you sell your home? | Bankrate

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    kali9; Illustration by Issiah Davis/Bankrate

    Key takeaways

    • When a home is sold, a HELOC must be paid off, along with any other debts secured by the property.
    • Outstanding HELOC balances are typically settled during the closing, out of the sale proceeds.
    • If the home sale proceeds are not enough to cover the HELOC and mortgage, the seller may need to come up with cash or explore alternative options like a short sale.

    Are you selling your home and have a home equity line of credit (HELOC)? Get ready to say goodbye to them both. As an active debt tied to the property, the HELOC must be paid off when that property changes hands.

    While this may sound tricky, it’s actually quite doable with the proper preparation. Here are the steps to take when selling a house with a HELOC to ensure a smooth transaction.

    Why do home sellers have to pay off their HELOC?

    A HELOC is essentially a loan, backed by the equity you have in your home. And any outstanding obligations secured by your home have to be settled when you sell your home. That includes your primary mortgage, along with the HELOC.

    During closing, the title company or closing attorney will order a payoff statement from your HELOC lender. The document will detail the amount needed to settle the HELOC: your outstanding balance, including any accrued interest and fees. But you don’t have to write a check — generally, the sum just gets deducted from the money the homebuyer is paying you.

    “It’s almost identical to a first-lien mortgage; it gets paid off, and then whatever proceeds are left after the payoff would be due to the seller,” says Tom Hutchens, executive vice president at Angel Oak Mortgage Solutions, an Atlanta-based correspondent lender.

    Example

    Imagine you sell your home for $400,000, with a $100,000 primary mortgage and a $50,000 HELOC remaining on your property. The $100,000 mortgage would have to be paid first due to its first-lien position, leaving you with $300,000. Then, you would settle your $50,000 HELOC, leaving you with $250,000. Any closing costs are deducted from this amount, leaving you with the final proceeds.

    After the sale closes, the line of credit is shut down. Your lender will confirm that the HELOC has been paid off and release any liens on the property.

    Complications in closing a HELOC when you sell a home

    While settling a HELOC may sound straightforward, two factors may complicate the process: the amount of equity you have in your home and whether the loan has any prepayment penalties.

    You are underwater

    When you sell your house, the proceeds go towards paying off your primary mortgage first. The money left after that then goes towards paying off your HELOC and any other debts secured by the property.

    But what if the sale price isn’t enough to cover all these debts — if you owe more on the home than it’s currently worth, a condition known as negative equity or being underwater/upside down?

    “There’s so much home equity out there…it would be extremely unique for that to be the case,” says Hutchens. “But if somebody were underwater when they sold the house, instead of getting proceeds, they would be bringing cash themselves to make up the difference.”

    And what if you don’t have cash to make up the difference? In that case, you’ve got a problem. You might try to do a short sale, in which you’re allowed to sell the home for less than your outstanding mortgage, though probably both the mortgage lender and the HELOC lender would have to agree.

    Other options that might make more sense:

    • Wait to sell until housing prices go up in your area, giving you time to build or rebuild your home equity stake
    • Wait until you’ve saved up enough money to cover the outstanding HELOC balance
    • Step up repayments on the HELOC to get that balance down
    • Take out a personal loan to cover the HELOC balance

    The lender has prepayment penalties

    A HELOC prepayment penalty is a fee the HELOC lender charges if you settle the debt ahead of schedule. These penalties reimburse the lender for the interest they would have earned if you had gone the full repayment period. Also referred to as an ‘early termination fee,’ the penalty can be 2 percent to 5 percent of the loan or a flat fee.

    Though not as common as years ago, prepayment penalties do still exist, especially among traditional banks. If you are unsure if your loan has one, contact your HELOC lender. Like any aspect of a loan, you can negotiate the terms, though there’s no guarantee the lender will agree.

    Bottom line on HELOCs when selling your home

    When you decide to sell your home, your HELOC’s life ends — but it doesn’t just disappear. You must repay the funds you withdrew from it, along with any accrued interest. The payoff occurs during closing, with the amount deducted from your sale proceeds.

    To keep things running smoothly, before even listing your home, get an accurate payoff amount for your HELOC and a sense of any early termination fees. Get the latest statement from your mortgage lender as well. Stay in touch with both lenders throughout the home-selling process.

    Knowing all these costs and where you stand ahead of time can help you avoid surprises at closing. The key is to ensure you won’t be caught short and can comfortably handle all the expenses of selling your home.

    “Home sellers “need to understand what their balances are on their first lien mortgage as well as their home equity line of credit,” Hutchens says. “They need to make sure whatever they’re looking to sell that property for, that they’re still going to be in a positive situation at the closing table. Or if not, understand how upside down they are before going forward with the sale of the property.”

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  • Home buyers thought mortgage rates were finally going to go down. Why hasn’t it happened yet?

    Home buyers thought mortgage rates were finally going to go down. Why hasn’t it happened yet?

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    Why are mortgage rates still so high?

    After a year of mortgage rates near 8%, home buyers are eager for good news. Some forecasters have buoyed their hopes, estimating that the rate on the 30-year mortgage will drop to 6% or lower this year. 

    But rates have not fallen by much thus far. The 30-year rate is currently averaging 6.64%, according to Freddie Mac. That’s despite the fact that the U.S. Federal Reserve hasn’t raised its benchmark interest rate since July 2023 and signaled in December that it would cut that rate in 2024. Meanwhile, economists in the real-estate sector have been anticipating a drop in mortgage rates since last fall.

    “Homebuyers may be feeling like the lower mortgage rates they’ve been promised in 2024 are not materializing,” Lisa Sturtevant, chief economist at Bright MLS, said in a statement. In a recent survey of Americans’ feelings about the housing market, 36% of respondents said they expect mortgage rates to fall in the next 12 months.

    While the Fed doesn’t set mortgage rates, it can influence them, just as it influences the overall U.S. economy through monetary policy. But even though the central bank has hit the brakes on tightening monetary policy, with the economy giving off mixed signals of strength and weakness, the timing of anticipated cuts to the benchmark rate remains unclear.

    That in turn creates uncertainty about when mortgage rates will drop enough to “unfreeze” the housing market. Home buyers are probably going to have to wait until the Fed acts definitively before they see those lower rates.

    The effect of a strong economy

    The strength of the U.S. economy is one reason mortgage rates have not yet fallen much, economists say. The job market is still hot, and inflation remains higher than the Fed’s goal, which is why the latest read on inflation, out Feb. 13, will be so closely watched. The fact that rates haven’t fallen this year is “a result of uncertainty about the economy and the timing of the Fed’s rate cuts,” Sturtevant said.

    “The strong job market is good news for the spring buying season, as higher household incomes are a necessary component, but it also means that mortgage rates are not likely to drop much further at this point,” Mike Fratantoni, chief economist at the Mortgage Bankers Association, told MarketWatch.

    Another reason mortgage rates are still high is that lenders are trying to protect themselves against lower rates in the future, Cris deRitis, deputy chief economist at Moody’s Analytics, told MarketWatch. If rates fall, lenders run the risk that a borrower will pay off a loan early by refinancing. That would limit how much in interest that lender could expect to make.

    “In an odd sort of way, then, the expectation that mortgage rates will be lower in the future can lead lenders to increase rates today to compensate for the prepayment risk,” deRitis said. 

    Lower rates, more competition among buyers

    So when can prospective buyers expect mortgage rates to fall significantly? 

    “Homebuyers should expect mortgage rates to move lower as we head through 2024,” Sturtevant said. While Fannie Mae expects rates to fall below 6% by the end of the year, other economists, like Fratantoni, expect the 30-year rate to finish the last quarter of 2024 at 6.1%.

    But even if rates do fall, that won’t necessarily mean buyers will be better able to afford a home, because a drop in rates could heat up competition for homes even as it boosts buyers’ purchasing power.

    “There is still very low inventory in the market, and buyers need to act quickly when they find the right home for them,” Sturtevant said.

    For the many homeowners who currently have a mortgage rate below 4%, rates stuck in the 6% range may be leading them to put off plans to sell their home and buy a new one.

    But it’s worth noting that since 2000, rates on 30-year mortgages have ranged from a high of about 8.62% to a low of 2.81%, averaging about 5% over that span. And compared with the historical average of the 1970s, which was 7.7%, the current rates in the 6% rage are not that high, deRitis noted.

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  • Here’s why you might not have to pay a 6% commission next time you sell a home

    Here’s why you might not have to pay a 6% commission next time you sell a home

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    Going back decades, if you wanted to buy or sell a stock on the open market, you had to pay a 2% commission to buy and a 2% commission to sell. Then the advent of discount brokerage, led by Charles Schwab Corp.
    SCHW,
    +1.64%    ,
    made lower commissions available until eventually, with improved technology and efficiency, the entire industry changed to enable the average investor to avoid commissions completely.

    But the internet hasn’t done much to reduce the cost of selling a home in the U.S. Sellers typically pay a 6% commission to a real-estate agent to list and sell a home, with the seller’s agent splitting that commission with the buyer’s agent. But all of that may change because of a verdict this week in a class-action lawsuit in federal court against the National Association of Realtors.

    Aarthi Swaminathan covers the case, what may happen next and the implications for home sellers and buyers:

    Real-estate advice from the Moneyist


    MarketWatch illustration

    Quentin Fottrell — the Moneyist — works with three readers to answer tricky real-estate questions:

    Economic outlook

    On Wednesday, Federal Reserve Chair Jerome Powell may have bolstered the case that the central bank is finished raising interest rates for this economic cycle. The federal-funds rate was left in its target range of 5.25% to 5.50%.

    Jon Gray, the president of Blackstone Group, spoke with MarketWatch Editor in Chief Mark DeCambre and said he expected the Fed to succeed in bringing down inflation without pushing the U.S. economy into a deep recession.

    Friday employment numbers: Jobs report shows 150,000 new jobs in October as U.S. labor market cools

    Bond-market trend switches again

    The U.S. Treasury yield curve has been inverted for nearly a year.


    FactSet

    Normally, longer-term bonds have higher yields than those with short maturities. But the yield curve has been inverted for nearly a year, with 3-month U.S. Treasury bills
    BX:TMUBMUSD03M
    having higher yields than 10-year Treasury notes
    BX:TMUBMUSD10Y.

    There has been elevated demand for long-term bonds, as investors have anticipated a recession and a reversal in Federal Reserve interest-rate policy. When interest rates decline, bond prices rise and vice versa.

    As you can see on the chart above, the yield curve was narrowing until mid-October. Yields on 10-year Treasury notes were close to 5% on Oct. 19, but they have been falling the past several days as the three-month yield has remained close to 5.5%.

    In this week’s ETF Wrap, Christine Idzelis reports on where all the money is flowing in the bond market.

    In the Bond Report, Vivien Lou Chen summarizes the action as investors react to the Federal Reserve’s decision not to change its federal-funds-rate target range this week and to other economic news.

    For income-seekers looking to avoid income taxes, here’s a deep dive into municipal bonds, with taxable-equivalent yields and a deeper look at those within four high-tax states.

    Ford’s good news — in the bond market

    Ford Motor Co.’s debt rating has been lifted by S&P to investment-grade.


    Getty Images

    Ford Motor Co.’s
    F,
    +4.14%
    credit rating was upgraded to an investment-grade rating by Standard & Poor’s on Monday. This takes about $67 billion in bonds out of the high-yield, or “junk,” market, as Ciara Linnane reports.

    A stock-market warning based on history

    The original Magnificent Seven.


    Courtesy Everett Collection

    By now you have probably heard the term “Magnificent Seven” used to describe stocks of the tremendous tech-oriented companies that have led this year’s rally for the S&P 500
    SPX
    : Apple Inc.
    AAPL,
    -0.52%    ,
    Microsoft Corp.
    MSFT,
    +1.29%    ,
    Amazon.com Inc.
    AMZN,
    +0.38%    ,
    Nvidia Corp.
    NVDA,
    +3.45%    ,
    Alphabet Inc.
    GOOGL,
    +1.26%

    GOOG,
    +1.39%    ,
    Meta Platforms Inc.
    META,
    +1.20%
    and Tesla Inc.
    TSLA,
    +0.66%    .
    With Tesla’s recent decline, that company is now the ninth-largest holding in the portfolio of the SPDR S&P 500 ETF Trust
    SPY,
    which tracks the benchmark index. Here are the top 10 companies held by SPY (11 stocks, including two common-share classes for Alphabet), with total returns through Thursday:

    Company

    		 Ticker

    		 % of SPY portfolio

    		 2023 total return

    		 2022 total return

    		 Total return since end of 2021
    Apple Inc.

    		 AAPL,
    -0.52%         		7.2%

    		 37%

    		 -26%

    		 1%
    Microsoft Corp.

    		 MSFT,
    +1.29%         		7.1%

    		 46%

    		 -28%

    		 5%
    Amazon.com Inc.

    		 AMZN,
    +0.38%         		3.5%

    		 64%

    		 -50%

    		 -17%
    Nvidia Corp.

    		 NVDA,
    +3.45%         		3.0%

    		 198%

    		 -50%

    		 48%
    Alphabet Inc. Class A

    		 GOOGL,
    +1.26%         		2.1%

    		 44%

    		 -39%

    		 -12%
    Meta Platforms Inc. Class A

    		 META,
    +1.20%         		1.9%

    		 158%

    		 -64%

    		 -8%
    Alphabet Inc. Class C

    		 GOOG,
    +1.39%         		1.8%

    		 45%

    		 -39%

    		 -11%
    Berkshire Hathaway Inc. Class B

    		 BRK.B,
    +0.80%         		1.8%

    		 13%

    		 3%

    		 17%
    Tesla Inc.

    		 TSLA,
    +0.66%         		1.7%

    		 77%

    		 -65%

    		 -38%
    UnitedHealth Group Inc.

    		 UNH,
    -0.98%         		1.4%

    		 2%

    		 7%

    		 9%
    Eli Lilly and Company

    		 LLY,
    -2.15%         		1.3%

    		 60%

    		 34%

    		 115%
    Sources: FactSet, State Street (for SPY holdings)

    Five of these stocks (including the two Alphabet share classes) are still down from the end of 2021. SPY itself has returned 14% this year, following an 18% decline in 2022. It is still down 7% from the end of 2021.

    Mark Hulbert makes the case that a decade from now, the Magnificent Seven are unlikely to be among the largest companies in the stock market.

    More from Hulbert: These dividend stocks and ETFs have healthy yields that can lift your portfolio

    A different market opportunity: India is seeing a multidecade growth surge. Here’s how you can invest in it.

    The MarketWatch 50


    MarketWatch

    The MarketWatch 50 series is back, with articles and video interviews starting this week, including:

    PayPal soars after earnings report

    PayPal CEO Alex Chriss.


    MarketWatch/PayPal

    After the market close on Wednesday, PayPal Holdings Inc.
    PYPL,
    +1.89%
    announced quarterly results that came in ahead of analysts’ expectations, and the stock soared 7% on Thursday even though the company lowered its target for improving its operating margin.

    In the Ratings Game column, Emily Bary reports on the positive reaction to PayPal’s new CEO, Alex Chriss.

    A less enthusiastic earnings reaction: EV-products maker BorgWarner’s stock suffers biggest drop in 15 years after downbeat sales outlook

    Consumers drive mixed reactions to earnings results

    Apple Inc. reported mixed quarterly results.


    Mario Tama/Getty Images

    Here’s more of the latest corporate financial results and reactions. First the good news:

    And now the news that may not be so good:

    Harsh verdict for SBF

    FTX founder Sam Bankman-Fried.


    AP

    It might seem that some legal battles never end, but it took only a year from the collapse of FTX for the cryptocurrency exchange’s founder, Sam Bankman-Fried, to be convicted on all seven federal fraud and money-laundering charges brought against him. The charges were connected to the disappearance of $8 billion from FTX customer accounts.

    Here’s more reaction and coverage of the virtual-currency industry:

    Want more from MarketWatch? Sign up for this and other newsletters to get the latest news and advice on personal finance and investing.

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  • Home buyers flee the housing market as mortgage rates surge to the highest level since 2000

    Home buyers flee the housing market as mortgage rates surge to the highest level since 2000

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    The numbers: Mortgage rates rose for the fourth week in a row to the highest level since 2000, as the economy continues to show strength.

    Rates surged as the U.S. economy continued to show signs of resilience,  which signal to the market that the U.S. Federal Reserve may not be done with rate increases.

    The 30-year was averaging at 7.31%, which in part dampened demand for home-purchase mortgages to the lowest level since April 1995. 

    Demand for both purchases and refinancing fell. That overall pushed down the market composite index, a measure of mortgage application volume, the Mortgage Bankers Association (M.B.A.) said on Wednesday. 

    The market index fell 4.2% to 184.8 for the week that ended Aug. 18, relative to a week earlier. A year ago, the index stood at 270.1.

    Key details: High mortgage rates are weighing on home buyers’ budgets due to an increase in borrowing costs. Many buyers fled the market as a result of rates rising over the last week. The purchase index, which measures mortgage applications for the purchase of a home, fell 5% from last week.

    Rates hold little allure for homeowners hoping to refinance. The refinance index fell 2.8%.

    Rates rose across the board.

    The average contract rate for the 30-year mortgage for homes sold for $726,200 or less was 7.31% for the week ending August 18. That’s up from 7.16% the week before, the M.B.A. said. The 30-year is at the highest level since December 2000.

    The rate for jumbo loans, or the 30-year mortgage for homes sold for over $726,200, was 7.27%, up from 7.11% the previous week.

    The average rate for a 30-year mortgage backed by the Federal Housing Administration rose to 7.09% from 6.93%.

    The 15-year rose to 6.72%, up from last week’s 6.57%. 

    The rate for adjustable-rate mortgages rose to 6.5% from last week’s 6.2%. The share of adjustable-rate mortgages rose to 7.6%, the highest level in five months.

    The big picture: The housing market continues to be hammered by good economic news, which is pushing rates up and depressing home sales. Higher rates also discourage homeowners from selling, as their purchasing power erodes when they look for homes to buy. 

    As a result, both home-buying demand and supply of home listings continues to fall, bringing the market to a standstill. Until the economy shows signs of slowing, it’s likely that the housing market will remain in the doldrums.

    What the M.B.A. said:  “Applications for home purchase mortgages dropped to their lowest level since April 1995, as home buyers withdrew from the market due to the elevated rate environment and the erosion of purchasing power,” Joel Kan, deputy chief economist and vice president at the M.B.A., said in a statement.

    Kan added that there was an uptick in people using adjustable-rate mortgages. “Some home buyers are looking to lower their monthly payments by accepting some interest rate risk after the initial fixed period,” he said.

    Market reaction: The yield on the 10-year Treasury note
    BX:TMUBMUSD10Y
    was above 4.3% in early morning trading Wednesday.

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  • Buying a Home Is Getting Out of Reach. Those 7% Mortgage Rates Are the Reason Why.

    Buying a Home Is Getting Out of Reach. Those 7% Mortgage Rates Are the Reason Why.

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    Buying a Home Is Getting Out of Reach. How Much 7% Mortgage Rates Need to Fall.

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  • ‘There’s nothing in the data that shows prices crash’: America’s housing market is showing remarkable resilience

    ‘There’s nothing in the data that shows prices crash’: America’s housing market is showing remarkable resilience

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    The housing market may feel out of whack to home buyers coping with fast-rising home prices and 7% mortgage rates. But like it or not, the housing market is in the pink of health. 

    Several economic indicators that measure housing activity — from home prices to sentiment surveys — show that home builders and sellers (the few that are out there) are finding strong demand from home buyers. 

    News of the housing market’s relative health may be welcome to some — like real-estate agents and investors — but it’s becoming a concern for economists. The more buoyant the housing market, economists say, the more likely the U.S. Federal Reserve will unveil another interest-rate hike, which further heightens the risk of a recession.

    “‘The housing market has started to recover, and this is a problem for the Fed because more demand for housing will boost home prices and rents.’”


    — Torsten Slok, chief economist at Apollo

    “The housing market has started to recover, and this is a problem for the Fed because more demand for housing will boost home prices and rents,” Torsten Slok, chief economist at Apollo, wrote in a note in May. And housing is a big part of how the government measures inflation, he added. This will make it more difficult to reduce inflation from 5% to the Fed’s 2% inflation target, he said.

    If the Fed launches another rate hike, it would push mortgage rates, which are already in the 7% range, to go even higher. 

    “The housing market is in a very — if fragile — recovery,” Mike Simonsen, founder and president of real-estate analytics firm Altos Research, told MarketWatch. 

    “There appears to be more demand than available supply for homes, especially in the real-estate market,” he explained, which is keeping home prices high, but that doesn’t mean demand could evaporate if the current situation changes. Recall when rates doubled from pandemic-era lows in 2021 to 7% last year, which zapped home-buying momentum.

    House hunters have adjusted their expectations. But if rates were to jump from 7% today to even higher levels, “I would not be at all surprised if homebuyers stopped abruptly again,” Simonsen said, stating his thesis for the fragility of the sector. Americans broadly expect rates to go over 8%, according to a March survey by the New York Federal Reserve.

    MarketWatch looked at three housing-market indicators — and the picture looks rosier than ever:

    Active listings are down — blame interest rates 

    Redfin’s deputy chief economist, Taylor Marr, said his go-to indicator was active listings. 

    Active listings are down this spring, compared to the previous year, according to the company’s data. At the end of June, the number of homes listed for sale on the market was down 8.1% over the prior year.

    “It really captures that supply is pulling back significantly relative to demand,” Marr said.

    About 14 million mortgages were refinanced during the COVID-19 pandemic. Few homeowners find it in their interest to sell their home and give up an ultra-low mortgage rate they secured during that time. Selling a home in July 2023, and purchasing a new one may entail taking a mortgage rate in the 7% range.


    Redfin data says that active listings of homes are down.

    As a result, the housing market is seeing an excess of demand and not enough supply, which has led to a resurgence of bidding wars in some parts of the U.S.

    While this metric is showing signs of the housing market returning to life and heating up amid a shortage of houses for sale, Marr said he’s not yet ready to call it a recovery. “It’s hard to declare completely the bottom of the housing market,” he said.

    Still battle-scarred by the housing crash of the Great Recession, Marr said economists “might be hesitant” to say that the housing market is in recovery mode. “We still have a lot of uncertainty with the economy ahead,” he added. “If the economy really takes a turn three or four months from now for whatever reason, it could certainly bring the housing market back lower than it was even last November,” he added.

    The price gap between new and existing homes

    With a major shortage of resale homes, new-home sales have been taking off. 

    Home builders, understandably, are thrilled about the inventory shortage. 

    The National Association of Home Builders measures builders’ sentiment in a monthly index, and that indicator has been very cheery of late. In June, the index turned positive for the first time in nearly a year. Builders were scaling back price reductions; they were happy about current sales conditions as well as sales over the next six months, the NAHB said.

    “A bottom is forming for single-family home building as builder sentiment continues to gradually rise from the beginning of the year,” said Rob Dietz, chief economist of the NAHB.

    One of the major U.S. home builders, Lennar, also offered some commentary on its second-quarter earnings call last month. The company’s executive chairman, Stuart Miller, said that “the market and the economy will remain constructive for home builders as pent-up demand continues to come to market and consume affordable offerings.”

    Miller also doesn’t expect the supply issue to be fixed anytime soon: “We believe that the supply constraint will continue to limit available inventory and maintain supply-demand balance,” he said on the call. “The core elements of the supply shortage will not resolve in the near term as the almost 15-year production deficit will take years to resolve.”

    Home-builder confidence, as a result, is signaling high optimism about the future of the housing market, and a return to normalcy.

    As a result, housing starts have spiked as builders scramble to meet the demand. 


    Builders have ramped up building new single-family and multi-family homes.

    Ali Wolf, chief economist at Zonda, looks at how prices of new homes trend relative to resale homes as a key indicator of the health of the housing market. Her conclusion? Housing industry professionals involved in the construction and sale of new homes are out of a recession, given the robust demand. 

    In fact, demand has been so strong that new homes — generally considered to be more expensive than resales — have become more affordable in home buyers’ eyes given the competition in the existing home space. 

    Typically, new homes are 20% more expensive than resales, Wolf said.  And today? That spread has fallen to 4%. 

    So what’s going on? Builders are not necessarily slashing prices. Instead, existing home prices have risen as homeowners are reluctant to sell.

    That’s a good deal for buyers. New homes, Wolf said, are traditionally considered a “luxury good.” They’re brand new, and buyers can often customize them. They also require less maintenance than older homes.

    Sellers are holding out on cutting prices

    Simonsen, who leads Altos Research, said price cuts were his go-to indicator to gauge the health of the real-estate market. Specifically, price cuts formed a proxy for demand, he explained.

    “When the houses are on the market, if there are no buyers for the current houses that are listed, people start taking price cuts,” Simonsen said. 

    And to be clear, price cuts jumped last year, when rates jumped, he added. 

    But that dynamic has since changed, as seen in the chart below. “There are currently fewer price reductions now than in 2018 or 2019,” Simonsen said.


    Data from Redfin says that homeowners aren’t cutting prices on their homes when selling, possibly due to strong interest from buyers.

    And for those of you holding out for home prices to crash? Keep waiting, Simonsen said.

    “There’s nothing in the data that shows prices crash,” he said. Even if a recession hits at the end of the year, which results in more job layoffs, demand for home-buying falling, and an increase in foreclosures and distress, that’s still a few years from now, he added. 

    “There’s no signal of home prices crashing anywhere,” Simonsen added.

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  • I ruined my family’s finances by withdrawing from my 401(k) to buy a house – I regret it

    I ruined my family’s finances by withdrawing from my 401(k) to buy a house – I regret it

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    I recently made a panic decision to withdraw all my money from one retirement account and I am now closing on a house in February (about $200,000). I am 36 years old, married and have a 1-year-old. Half of me is regretting it, and I’m worried about next year’s taxes due to the withdrawal and the 10% penalty I paid.

    I have been saving up money with my family in order to buy our first home. Recently, however, interest rates have risen, making me worry that this window to get an affordable house was closing. In a fit of panic, I withdrew all of our $26,000 saved money from my 401(k), putting it in a high-yield savings account (3.75%). We have now chosen a home and will be using around $18,000 of this money for the down payment. 

    I am now worried that I might have to pay income taxes and a penalty for the withdrawal itself. I am extremely anxious over this situation as I feel I have destroyed our family’s financial future and that we cannot afford to pay taxes on the money I withdrew. 

    My main concern or question is, is there a way to tell the IRS that this money is being used toward a house? Retroactively? 

    See: I’m a single dad maxing out my retirement accounts and earning $100,000 – how do I make the most of my retirement dollars?

    Dear reader, 

    The first thing you need to do: Take a breath. Most decisions should not be made in a panic, especially when involving money. 

    Because you withdrew from your 401(k), yes, you will have to pay taxes and a penalty. Had it been a loan, you’d have to pay interest on what you borrowed, but it would be to your own account. Keep in mind however that loans from your employer-based retirement plans are also risky – if you were to separate from your job, for whatever reason, you’d be responsible to pay it back or it would be treated as a distribution.

    I understand your sense of urgency in wanting to buy a home during a more favorable market, but your time now should be spent on getting yourself financially situated and saving for the future. 

    “I wouldn’t advise this or done it this way, but he’s not stuck and it’s not detrimental – it’s just a tough lesson to learn,” said Jordan Benold, a certified financial planner at Benold Financial Planning.  

    Get very serious about your current finances and find a way to earmark a portion of your income to savings if at all possible. There are a few things you should be doing. 

    First, assess how much you will be paying in taxes and penalties. I’m not sure what your tax bracket is, but did this distribution push you into a higher tax bracket? You can use a calculator or talk to an accountant to see what that withdrawal will incur in taxes – then make sure you can pay it, or talk to the Internal Revenue Service about an extension. There are penalties for failing to file your taxes or pay them, and you don’t want to add that on top of your stress. 

    Also see: We have 25 years until retirement and are saving 25% of our income – are we doing it right? And are we saving too much?

    The IRS may not be able to do anything for you in terms of waiving those penalties – though it doesn’t hurt to ask, even if you have to wait on the phone for a while to talk to someone – but communication and attention to detail are key when it comes to your taxes. Getting an IRS agent on the phone and talking through your situation won’t be time wasted. There are so many rules, and an agent can help make sense of your options.

    Read: The days of IRS forgiveness for RMD mistakes may soon be over

    Once you get that sorted, look extremely carefully at whatever money you have coming in and what’s going out. You’re about to close on a home, and that costs money – not just the home itself, but all of the extras associated with closing. You may also need money for insurance, furniture, any repairs and so on if you haven’t factored that in yet, so fit that into your budget for when you sign the papers. Beyond that, list every expense you expect to have for the next 12 months – home insurance and taxes, a mortgage or utilities, groceries, medicine, any other nonnegotiable costs and add it all up. Don’t forget anything – ask your partner if there’s anything you may have forgotten. 

    Then compare it to your income. Are you under? Are you over? What changes can you make without totally draining your happiness? I always advocate for a balance…yes, in some cases you have to omit a few expenses for the time being when building up an emergency savings account or paying down debt, but don’t completely rob yourself of joy or all of your hard work may backfire. If you really need to buckle down, make a separate list of activities and entertainment you can get for free (or as close to free as possible)—walks in the park or on the beach with your partner and child, museums on free days, pot lucks and at-home movie nights with family and friends and so on. 

    Want more actionable tips for your retirement savings journey? Read MarketWatch’s “Retirement Hacks” column

    Earmark a portion of your income to replenish your retirement savings before you try saving for any other goals. (This is separate from an emergency savings account, however – you should have one of those.) You may do that with payroll deductions in your 401(k), or also by allocating some of your savings to an IRA outside of the 401(k). 

    Take some time to learn the rules of your retirement plans. For example, an IRA allows an investor to take $10,000 out of the account penalty-free if it’s for a first-time home purchase (whereas a 401(k) does not have that exception). It may be too late for that, but there are other perks with various retirement accounts. 

    The 401(k) has a higher contribution limit and also comes with the possibility of employer matches (if your company offers it), whereas an IRA allows for penalty-free withdrawals for college. With a traditional IRA, you’d have to pay taxes on the withdrawal, whereas with a Roth IRA you’ve already paid the taxes and won’t have to pay any more for withdrawing from your contributions (you may have to pay taxes on the earnings portion, so follow distribution rules closely).

    Remember – you don’t want to make distributions from your retirement savings for just anything. You can borrow money for a home or college, but you can’t borrow money for retirement, so it’s important to protect those accounts. Familiarize yourself with the pros and cons of all accounts so that you can maximize your savings and diversify your withdrawal options when you finally get to retirement. 

    So just buckle down, get yourself in order and think of the future. “He’s got plenty of time – 30 to 40 years to work,” Benold said. “This might be a distant memory that he hopes he can forget.” 

    Have a question about your own retirement savings? Email us at HelpMeRetire@marketwatch.com

    Readers: Do you have suggestions for this reader? Add them in the comments below.

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  • Housing starts fall again as high mortgage rates scare off U.S. home buyers

    Housing starts fall again as high mortgage rates scare off U.S. home buyers

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    The numbers: Construction on new houses fell 4.2% in October as high mortgage rates put off buyers and forced builders to scale back, a situation that’s likely to continue through 2023.

    U.S. housing starts slowed to an annual pace of 1.43 million last month from 1.49 million in September. That figure reflects how many homes would be built in 2022 if construction took place at same rate over the entire year as it did in October.

    Economists polled by MarketWatch had expected housing starts to register a rate of 1.41 million after adjusting for the typical seasonal swings in demand.

    New construction hit a record 1.8 million in April before tapering off.

    The number of permits, meanwhile, slipped 2.4% to a rate of 1.53 million, down sharply from a record 1.9 million last December.

    Permits foreshadow how many houses are likely to be built in the months ahead, assuming a stable real estate market. But a major increase in mortgage rates this year has depressed demand and forced builders to scale back plans.

    Key details: Single-family home construction fell 6.1% to an annual rate of 855,000 in October. Projects with five units or more registered a 556,000 rate, little changed from the prior month.

    Housing starts are down 9% from a year ago, when mortgage rates briefly dipped below 3%.

    Permits have fallen 10% from a year earlier.

    Big picture: The highest mortgage rates in several decades have stifled new construction and are likely to do so through the next year or longer. The rate on a 30-year fixed mortgage recently topped 7%, more than double the rate a year ago.

    While the U.S. has an acute need for more housing, fewer people can now afford to buy a home. Home prices are starting to come off record highs, but not by much.

    Looking ahead: “Higher mortgage rates continue to exact a heavy toll on new construction,” said Richard Moody, chief economist of Regions Financial.

    Market reaction: The Dow Jones Industrial Average
    DJIA,
    -0.18%
    and S&P 500
    SPX,
    -1.01%
    fell in Thursday trades.

    Also read: The median income needed to buy a typical home is over $88,000 — $40,000 more than before the pandemic

    Related: Home prices will fall in 2023, but affordability will be at its worst since 1985, research firm says

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  • Mortgage rates march towards 7%, reaching highest level since 2007

    Mortgage rates march towards 7%, reaching highest level since 2007

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    The numbers: Mortgage rates continue to march towards 7%, continuing to pressure potential homeowners looking to buy a home. 

    The 30-year fixed-rate mortgage averaged 6.7% as of Sept. 29, according to data released by Freddie Mac
    FMCC,
    +0.75%
    on Thursday. 

    Mortgage rates are up as the Federal Reserve pushed key interest rates up to deal with the worst inflation the country has seen in 40 years. 

    That’s up 41 basis points from the previous week — one basis point is equal to one hundredth of a percentage point, or 1% of 1%. 

    The rise in rates is bad news for prospective buyers, as it potentially adds hundreds of dollars to their mortgage payments.

    Mortgage rates are now at highs last seen since mid-2007. To put the latest rate in perspective: A year ago, the 30-year was at 3.01%.

    “Mortgage rates are now at highs last seen since mid-2007. To put the latest rate in perspective: A year ago, the 30-year was at 3.01%.”

    Bloomberg’s chief economist Michael McDonough said a $2,500 monthly mortgage payment — with 20% down — would have gotten a buyer a $758,000 home last year.

    This year? You’d get a lot less house — with $2,500 per month, you’d only be able to afford a $476,000 home, he wrote on Twitter
    TWTR,
    -1.12%    .

    The median price of an existing home in the U.S. was $389,500 in August, down from $403,800 the previous month, the National Association of Realtors said.

    The average rate on the 15-year mortgage also rose over the past week to 5.96%. The adjustable-rate mortgage averaged 5.3%, up from the prior week.

    “The uncertainty and volatility in financial markets is heavily impacting mortgage rates,” Sam Khater, chief economist at Freddie Mac, said in a statement.

    Khater added that Freddie Mac’s survey of lenders revealed a large dispersion in rates, so home buyers should shop around with lenders to find a good quote.

    Mortgage applications also fell in the latest week, as cautious buyers continue to pull back as rates march towards 7%. 

    The yield on the 10-year Treasury note
    TMUBMUSD10Y,
    3.784%
    rose slightly above 3.8% in morning trading on Thursday.

    Got thoughts on the housing market? Write to MarketWatch reporter Aarthi Swaminathan at aarthi@marketwatch.com

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