Refinancing Your Mortgage vs. Selling Your Home in 2024

In recent years, high prices of food, energy, and services have put pressure on homeowners. When interest rates were low, you might have considered refinancing your mortgage to save money. You might also have contemplated selling your home to cash out on the steep rise in home values. These choices may feel more difficult, however, given the Fed’s recent rate hikes and increased housing costs. You may be asking, “Should I refinance my mortgage or sell?”

In this post, we’ll provide expert insights to help you answer this question. We’ll also review the reasons homeowners may opt to refinance, how to compare loan types, and the importance of getting expert advice for your specific situation. But first, let’s take a look at how the 2024 economic climate and housing market may influence your decision.

How might interest rates, inflation, and home prices affect your decision?

To try and curb inflation, the Federal Reserve raised interest rates seven times in 2022 and four times in 2023. This pushed the rate of a 30-year fixed mortgage from its lowest pandemic-era recorded rate of 2.65% in January 2021 to where it sits now, dancing between 6% and 7%.

Refinancing is likely not as beneficial now: What do these numbers mean for you if you’d like to refinance your mortgage? Depending on your current interest rate, they could mean that your monthly payment would go up, or that you end up paying significantly more interest over the life of your loan. While these rates are not high compared with the 80s, 90s, and even 2000s, if you purchased your home after 2008 (but before 2022) or even refinanced during the period of low interest rates, there’s a good chance you’ve enjoyed a lower rate.

Selling might be harder but profitable: So, what if you sell instead? As of June 2024, the National Association of Realtors reports that sales of existing homes are down 5.4% from the previous year, while the median home sales price is up 4.1%, at a record high of $426,900. In other words, although your home’s current market value may be higher than ever — boosting that equity you might want to liquidate — it may not be quite as easy to sell as it would have been a few years ago.

Changes from seller’s market of prior years: In HomeLight’s 2023 End of Year survey of more than 1,000 top agents across the country, 50% said their local market was still in a seller’s market, but that was down from 72% in summer 2023, and down from 98% at the start of 2022. In 2024, the current housing market is characterized by limited inventory and increased home prices, making affordability a continued challenge for buyers. Of course, market conditions are heavily dependent on location and the desirability of individual homes.

A top agent can make it happen: To get expert insight into today’s changing market, we spoke to David Lewis, a top real estate agent in the Atlanta, Georgia, suburbs with more than 16 years of experience. While interest rates are making many buyers hesitant, Lewis explains, “A good house in good condition at the right price always sells quickly.”

He recommends partnering with an experienced agent and lender who are up to date on the changing market and know what will make your home desirable to today’s buyers. HomeLight can connect you with a top agent who is well-equipped to navigate a challenging market. It takes just two minutes to find an agent tailored to your needs.

Now that we’ve glimpsed the unique challenges of the 2024 market, it’s time to learn more about your options.

What’s the advantage of getting a new mortgage?

When you refinance your loan, you’re paying off your existing mortgage and replacing it with a new loan with different terms and interest rates. With higher mortgage rates, many homeowners abandoned the idea of refinancing in 2023. However, things are looking up in 2024. The number of refinancing applications is up 16.4% in July 2024 compared to the same period in 2023, Fannie Mae reports.