What to do when rising interest rates and prices prevent re-entry into the housing market after selling our home: A personal story.
In a heartfelt letter to financial columnist Quentin Fottrell, a reader shares their experience with the current housing market and seeks advice on their next steps. The reader takes us back to 2017 when they were married with three young children, working low-paying jobs and living in a rented mobile home. They managed to save enough to purchase their first home in 2018, but after facing financial difficulties and divorce, they were forced to sell the house. Fast forward to 2021, the reader found themselves in a better financial position, only to be hit by unexpected job loss and mounting debt. They decided to sell their home again, hoping to use the proceeds to build their dream home. However, they found themselves unable to afford the rising prices and interest rates in the market, and had to move in with the reader’s parents.
The reader expresses regret over selling their home and laments the current state of the housing market. They seek advice on what to do next.
Quentin Fottrell responds by acknowledging the reader’s frustration and offers some insights and suggestions. He suggests viewing this time as a temporary chapter in their lives and encourages them to focus on other aspects while saving and waiting for interest rates to fall. While predicting rate decreases is challenging, many economists expect rates to fall in the coming years. Fottrell also points out that historically, a 5% interest rate is considered favorable for both buyers and sellers.
He advises the reader to consider renovating their parents’ home instead of finding another house, especially since they have savings. He also suggests exploring adjustable-rate mortgages and compromising on their next home, such as looking for existing properties that can accommodate their blended family. Fottrell emphasizes the value of budgeting and recommends considering potential job opportunities for the reader’s wife in the accounting field, as it is a growing industry.
In conclusion, Fottrell encourages the reader to forgive themselves for past choices and not to give up hope on owning a home again. He reassures them that with careful planning, saving, and exploring different options, they can work towards their goal of homeownership in the future.
The reader is left with a sense of hope and a renewed determination to navigate the challenging housing market and find a solution that works for their family.
