If you’ve been thinking about selling your house and moving up to a bigger or more upgraded home, you’re not alone. According to a recent survey by Inman, the top motivator for today’s homebuyers is the desire for more space or a nicer home (see graph below):
However, like many others, you may have been holding off on making that move due to recent market challenges. It’s understandable—affordability plays a huge role when you’re planning to upgrade, especially if it might mean higher monthly housing costs. But here’s the good news: Now might actually be a great time to take that step. Let’s break down why.
1. You Have a Lot of Equity to Leverage
One of the biggest advantages in today’s market is the amount of equity you’ve likely built up in your current home. Despite shifts in the housing market, home prices have risen steadily over the years, allowing homeowners to build significant equity. Selma Hepp, Chief Economist at CoreLogic, explains:
“Persistent home price growth has continued to fuel home equity gains for existing homeowners who now average about $315,000 in equity and almost $129,000 more than at the onset of the pandemic.”
What does that mean for you? If you’ve owned your home for a few years, you may have a substantial amount of equity that can be used toward the down payment on your next home. This could help keep your new mortgage more affordable and make upgrading more feasible than you might think. If you’re curious about how much equity you’ve gained, reach out to your real estate agent for a professional equity assessment.
2. Mortgage Rates Have Fallen, Boosting Your Purchasing Power
Another reason why now could be a smart time to move: mortgage rates have recently declined. Lower rates can help reduce your future monthly payments and give you more purchasing power. As Nadia Evangelou, Senior Economist and Director of Real Estate Research at the National Association of Realtors (NAR), notes:
“When mortgage rates fall, the interest portion of monthly payments decreases, which lowers the total payment. This makes it easier for more borrowers to . . . qualify for mortgages that may have been unaffordable at higher rates.”
With rates trending downward, you have more flexibility when looking at homes and may be able to afford a property that was previously out of your budget. Working with a trusted lender can help you figure out the best mortgage plan for your financial situation.
Bottom Line
If you’ve been dreaming of upgrading to a bigger or nicer home, now might be the ideal time to make it happen. Your accumulated equity, combined with lower mortgage rates, puts you in a great position to achieve your homeownership goals.
To make the most informed decisions and take advantage of today’s market, reach out to schedule a complimentary consultation. We’re here to guide you through every step of the process and help you find the home that fits your dreams and budget.
October 7, 2024/by KCM CREW
