Smaller homes have seen significant price growth over larger ones, and that means some homeowners may be sitting on a lot of equity – a lot more than they might realize. With rates on mortgages still low by historical standards but anticipated to edge up soon, homeowners with equity in their current home may find this is the perfect time to move-up into a larger one.
It’s a great time for move-up buyers to sell
As outlined by Fortune Magazine, many growing families are in a housing sweet spot right now that will likely continue into the first part of 2017: Between 2011 and 2016, the typical price on a two-bedroom house rose 59% nationwide, but four-bedroom homes only rose 41%, according to ATTOM Data Solutions.
In many markets, move-up buyers can even find more choices in the higher price ranges. Housing supplies have increased nearly 8% in the $500,000 to $750,000 range.
Due to the increased equity in their smaller home, many sellers should be in a good position to walk away with additional money from their home sale to use for their next downpayment. And move-up sellers could possibly be more motivated to choose a higher offer over a speedier close, says Lawrence Yun, the chief economist for the National Association of Realtors®.
However, small home sellers who would like to move up ought to get their financing in order quickly. The record-low rates on mortgages in 2016 aren’t likely to last much longer. Average rates are predicted to go up about half a percent in 2017, says Dan Smith, president of PrivatePlus Mortgage.
While rates should still remain historically low, any increase will make a mortgage less affordable. If rates jump from 3.7 percent to 4.2% on a 30-year fixed-rate mortgage, for example, it would mean an $864 rise in annual payments on a $250,000 mortgage.
Nick & Cindy Davis have assisted many sellers sell and purchase their new home simultaneously, it just takes a little extra coordination, so why leave that to an amateur. Give us a call at 813-300-7116 or simply click here to contact us.
