Thinking about selling your home in 2021? If so, you might want to consider selling it sooner rather than later.

Low mortgage rates have boosted demand among buyers, while low inventory conditions give sellers the upper hand. But all of this could change later in 2021. Rising home prices could cool the housing market over the coming months, especially if mortgage rates creep upward as well.

Spring and Summer 2021: a Good Time to Sell

It’s currently a strong seller’s market in most U.S. cities. But things could begin to shift toward the “center” later this year. Home prices continue to climb in most housing markets, and this could dampen demand going forward. Meanwhile, inventory growth could give buyers more options.

Right now is a great time to sell a home. But six months from now, who knows.

Here are three reasons why sellers across the U.S. might want to consider listing their homes for sale sooner rather than later:

1. Peak home selling “season” is coming.

According to several industry analysts, we are now entering the ideal time to sell a home. Peak selling “season” starts in April and runs through July.

That doesn’t mean you can’t sell a home in the fall or winter months. It just means you can probably sell your house faster, and possibly for a higher price, if you strike while the iron is hot. Postponing the sale until later in 2021, on the other hand, could make it harder to sell.

While real estate market conditions can vary from one city or region to the next, experts say that spring and early summer are the best months for selling a house in the U.S.

April 2021 housing market report from Realtor.comsaid that mid to late April is the absolute best time to sell a house. According to their analysis, the peak selling “season” extends through May.

To quote that report:

“When taking local market trends into account in the 50 largest U.S. metros, the best week to list varies by locale throughout March, April and May.”

So that’s the first consideration for those planning to sell a home in 2021. If you’re looking to sell as quickly as possible, you might consider listing it sometime within the next three months. Sellers who go on the market during the spring and early summer could potentially sell their homes for more money, compared to those who wait until fall or winter.

2. Low inventory conditions currently favor sellers.

Here’s something home buyers probably don’t want to hear right now. In most cities across the U.S., low inventory conditions have created a strong seller’s market. Tight supply conditions and strong demand have shifted the real estate market in favor of sellers.

But it won’t be like this forever. In fact, there’s a strong chance that inventory levels will increase throughout the rest of this year, as more properties come onto the market.

For now, however, housing market supply remains very low in most U.S. cities. This is another trend that favors sellers. Those who sell a home within the first half of 2021 will directly benefit from the ongoing supply shortage.

According to a recent report from Realtor.com, the number of homes for sale nationwide dropped by -52% from March 2020 to March 2021. That’s a major reduction in supply. It translates to 534,000 fewer homes for sale in March of this year, compared to a year ago.

Some metro areas experienced an even bigger drop in inventory, over the past year or so. The number of homes for sale in Austin, Texas fell by -72.7% during the 12-month timeframe mentioned above. Jacksonville, Florida and Raleigh, North Carolina also experienced inventory declines greater than 70%.

In these (and many other) housing markets across the country, selling a home has never been easier. Forget about painting, staging and landscaping. Just list the home, and then wait for the offers to pour in. Record-low inventory has home buyers lining up to make an offer. And in many cases, they’re willing to offer more than the list price.

But we’re starting to see some improvement on the inventory front. It seems that more and more sellers are starting to list their homes for sale. This could shift the inventory situation, as we move into the latter part of 2021. If this trend continues, sellers might have to work a little harder to find the right buyer.

3. Rising prices and mortgage rates could cool the market.

Record-low mortgage rates have helped fuel the housing market over the past year or so. Home sales remained strong throughout most of 2020, despite the coronavirus pandemic and resulting economic slowdown. And low mortgage rates were one of the primary factors driving that trend.

During the first week of January 2021, the average rate for a 30-year fixed mortgage loan fell to a record low 2.65%. That was the lowest average in 50 years of record-keeping.

But mortgage rates have risen since then. They rose steadily from February to March of this year, topping out at 3.18% by the beginning of April. In mid-April, 30-year mortgage rates dropped back down to around 3.04% (on average). There has been a recent uptick in rates

We are currently seeing more volatility with mortgage rates, compared to the steady decline that occurred through 2020 in early 2021. Some forecasters, including the Mortgage Bankers Association and Freddie Mac, expect to see higher rates toward the end of this year and into 2022. This could have a cooling effect on the housing market, making it harder to sell a home.

Rising home prices also play a role here — and arguably a bigger one.

In most cities across the country, home prices rose steadily over the past 18 months. Not even a global pandemic could stop U.S. house prices from climbing. This is another important consideration for those planning to sell a home in 2021. As house values rise, it reduces the number of people who can afford to buy. It can shrink the pool of qualified buyers and cool the housing market.

According to Zillow, the median home price in the U.S. rose by around 10% over the past year (as of April 2021). Looking forward, the company’s research team expects prices to continue climbing.

In mid-April, the company’s website stated:

“United States home values have gone up 9.9% over the past year and Zillow predicts they will rise 11.4% in the next year.”

If home prices and mortgage rates climb over the coming months, it could create a “double whammy” effect that slows the housing market. Higher interest rates and house prices could squeeze many buyers out of the market. Something to consider, if you plan to sell your home in 2021.

Bottom Line: Seller’s Market Won’t Last Forever

To summarize, real estate conditions within many U.S. cities could change as we progress through 2021 and into 2022. Recent trends suggest that more sellers are now listing their homes for sale, and that could continue over the coming months.

At the same time, steadily rising prices could reduce the pool of eligible home buyers. Higher mortgage rates could compound this effect. Both of these factors — but especially home prices — could reduce buyer demand as we move further into 2021.

It’s currently a great time to sell a house, in most U.S. cities. Supply is low and demand is high. We also happen to be entering the peak selling season, based on data from previous years. But we don’t know how long the party will last, for sellers.