The Value of My Home Has Nearly Doubled Since I Bought It 7 Years Ago. Here Are 4 Reasons I Won’t Sell

I purchased my modest, ranch-style home back in 2016 when I was in my late 20s. I paid $168,000 for the home, which consists of just over 1,600 square feet with two bedrooms (and an office that could easily be converted to a third bedroom), two full baths, a small fenced-in yard, and an unfinished basement. Zillow estimates that if I sold today, I would stand to earn $332,300 — just under double what I paid seven years ago!

A lot of homeowners in my position might be eager to sell their home and lock in the profits generated by appreciation of their home’s price, but not me. In fact, there are four very good reasons why I have zero intention of selling anytime soon.

1. My house still suits my needs perfectly

While it might not sound like much, this little house is perfect for myself, my fiancé, and our dog. We have no children at home and have no plans to grow our family, so we don’t need a ton of extra space to stretch out in (and pay bills on). We’re in a great location that’s only miles from the metropolis of Columbus, but also only miles in the other direction from my hometown and where my family lives. We’ve got a selection of grocery stores, restaurants, gas stations, and other businesses just minutes away. In short, we have everything we need right where we’re currently located.

2. There’s still a lot of competition among buyers in the market

The National Association of Realtors’ June data shows a 3.1-month supply of homes for sale. While up slightly year over year from June 2022’s 2.9-month supply of homes, the current supply is not enough to satisfy the number of buyers clamoring to purchase homes. Generally it takes between a four- and six-month supply of homes to balance the market. Right now, sellers have the upper hand, while buyers are left picking over the scraps and paying a premium to purchase whatever home they settle on.

3. Higher home prices are a problem

If I were to sell now, getting almost double what I paid for my home would be a huge win. What’s not such a win, however, is the fact that I would then have to turn around and find a new home to purchase at those inflated prices. Say, for example, I sell my home for Zillow’s estimation of $332,300 and come away with a profit of $200,000 after paying off what’s left of my current mortgage and accounting for agent fees. Even if I take that full amount and put it toward the down payment on a new home, my new mortgage is still going to be significantly larger than my last one.

Let’s assume I find a new home at the St. Louis Fed’s Q1 2023 median sales price of $436,800. After putting $200,000 down, I still owe $236,800 on the home. That’s almost 71% more than the total sales price I paid in 2016 of $168,000.

4. Yep, that’s right, mortgage rates are higher too

In sticking with the “everything is more expensive” theme, mortgage rates are also up significantly right now. The most recent data from Freddie Mac as of July 13 shows the average rate for a 30-year fixed-rate mortgage at 6.96%. When I bought my home in 2016, I locked in a rate of just 3.5%. So that’s another figure that’s almost doubled that I would have to face if I sold my home and bought again in today’s market. Let’s use our mortgage calculator and look at a simple illustration to see how much today’s higher rates would cost me using our example above of having to finance $236,800 with rates of 3.5% compared to 6.96% with a 30-year mortgage:

Author calculations using The Ascent’s mortgage calculator.

Today’s rates would have me paying more than $500 per month extra in principal and interest compared to financing again at my current rate for the same home. Not only that, but with today’s rates I’d end up paying $328,069 in total interest versus just $146,191 in total interest at a 3.5% rate. When looking at the numbers, the idea of giving up my low interest rate in favor of a much higher one is just not an attractive prospect.

It’s not all bad

If you’re in a situation where you have no choice but to move — say, your family is growing or you’ve accepted a new job in another city — then unfortunately you may have no choice than to enter the fray of the current housing market. But keep in mind, things could always be worse. Rates could be even higher or housing inventory could be even lower, and hey – at least you’ll be getting a premium on your sale. So all things considered, what we’re facing right now isn’t really all that bad.

Be sure to do your due diligence when starting your home search. Find a good real estate agent that can help you with both selling your home and purchasing a new one. Compare mortgage lenders to be sure you get the best rate available. And come armed with a pre-approval letter to give yourself the best chance at standing out as a qualified buyer in a sea of prospective homeowners.