How Long Should You Own A House Before Selling?
Owning a home is a big responsibility, and it’s also a big investment. Many people know that they’ll sell their homes one day, but figuring out the perfect timing is easier said than done. So, how long should you live in a house before selling?
You should live in a house for at least 5 years before selling, but it’s better to wait until you’ve owned the home for 10-12 years. That way, you’ll have built a lot of equity or even paid your house off completely, which is the best scenario. Wait until interest rates are low and it’s a seller’s market during the spring and summer.
Keep in mind that you’ll most likely spend tens of thousands of dollars on closing costs and your real estate agent’s commission. However, that’s a part of doing business when selling a house. Follow along as we explore how long you should own a house before selling it.
How Long Should You Live In A House Before Selling?
It’s typically recommended to live in a house for 5 years before selling it. However, there is no ironclad rule regarding how soon you should sell a house, as many factors are at play. You build equity throughout your homeownership, which naturally increases with time.
Buying and selling homes is quite expensive, as you must handle many fees and pay taxes. Selling a house right after buying it is not typically recommended, and the expense of it may outweigh any profits. You won’t have built much equity, if any, when selling a house to soon after buying it.
You’ll incur many fees and expenses when buying the house, and then you’ll have more expenses when selling it. It’s hard to imagine a scenario where you could profit significantly from selling a house you haven’t owned for long. You’re better off living in a house for 10-12 years before selling it.
What Happens If You Sell Your House After Less Than Five Years?
Depending on the state of the housing market, among other factors, you’ll likely lose money by selling a house less than 5 years after buying it. For example, in 2025, the home appreciation rate dropped by 2.5%, negatively impacting resale value. If you own a house for a brief period while the appreciation rate is down, it won’t go up in value too much.
That’s still good, as the rate is positive, but houses didn’t increase much in value during that time. If your house needs to be updated, you’re going to have to dump another few thousand dollars into it. This, paired with insurance, property taxes, and basic expenses, can create a large overhead.
Naturally, you’ll also have the odds stacked against you if the economy experiences a downturn. This all may seem unlikely to happen within 5 years, but stranger things have happened. The longer you own your home and the more equity you build, the more likely you are to get a greater return on your investment.
What To Consider Before Selling Your House
Selling a house is a big decision, and it’s not something you should rush into. How and when you sell your house will ultimately determine your return on investment. You can avoid a lot of unnecessary stress and heartache if you consider a few things before selling your house, including:
1. Equity
If you don’t have enough equity, you may want to wait to sell your house. Ideally, you should have at least 20% equity before you sell your home to ensure it’s worthwhile. If you owe more than 80% on your mortgage, then selling your home isn’t a great idea.
The goal is to have enough equity that you can sell your home and make a profit. That way, you can put money toward a new house or investments. Having 100% equity is the best-case scenario, and it means that you sold your house after having paid off your mortgage.
2. Market Conditions
Not everyone has the luxury of waiting until the market is better for sellers. However, if you do wait until it’s a seller’s market, you’ll benefit from it greatly. For example, you’re more likely to profit from selling your home during the spring and summer than the fall and winter.
More people look at houses during the spring and summer, so you can field multiple offers. The only downside is that you must compete with other people selling their houses at the same time. Conversely, you won’t have as much competition during the winter, but winter is also a buyer’s market.
That said, you can typically sell your house much faster during the winter than during summer. Buyers are more motivated to quickly close on a house between January and March. Of course, if the housing market is down overall, the timing doesn’t make as big a difference.
3. Current Interest Rates
When selling a house, you’re most likely planning to buy another house. In doing so, you must apply for a new mortgage, that is, unless you plan to buy the house in cash. It’s not a great idea to sell your current home if your next mortgage would have a higher interest rate.
This is called a mortgage lock-in effect, and it can deter many people from selling their home. You may be used to a lower interest rate, so switching to one that’s more expensive can be quite disappointing. It’s worth waiting a while if you want to avoid exorbitantly expensive mortgage interest rates.
4. Transaction Costs
If selling a house were cheap and easy, nobody would put much thought into it. However, the expensive transaction costs and everything that comes along with them can add up quickly. Understandably, real estate agents earn a commission on the sale, which is typically up to 6%.
This, paired with the other closing costs, can total tens of thousands of dollars in some cases. You can expect to spend 10% to 15% of the home’s value on the closing transaction costs. While you can avoid these costs if you sell your house without a real estate agent, that’s not always a good idea.
You’re at a bigger risk of falling victim to fraud, and you’re unlikely to sell your home for as much as you would with an agent. While you can avoid some of the transaction costs, you also must take on more risk. It’s always worth partnering with a real estate agent, even if they get a cut of the sale.
Summing It Up
Ideally, you should own a home for 10 to 12 years before selling it to maximize your profits. The 5-year rule still stands, but you’ll build more equity if you live in the house for longer than that. It’s best to wait to sell your home until it’s a seller’s market, and to wait until the interest rates are low. That way, you won’t spend a fortune on your next home’s mortgage.
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Nick Durante is a professional writer with a primary focus on home improvement. When he is not writing about home improvement or taking on projects around the house, he likes to read and create art. He is always looking towards the newest trends in home improvement.
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