As home equity increases across the greater Asheville, Waynesville, and Hendersonville areas, move-up buyers are selling their current properties to replace them with pricier homes. The recent improvements in home equity have allowed these buyers to put larger down payments on new homes.
“An important sign of a healthy and sustainable recovery is increased housing turnover driven by trade-up buying, which is more or less discretionary spending,” says Yanling Mayer, FNC’s director of research. “These buyers are typically more responsive to market conditions and financial incentives.”
Many move-up homebuyers are benefiting from 30 year fixed rate quotes ranging between 4.0 to 4.125% for top tier scenarios. With the Fed almost certainly on track for a December rate hike, there is much more risk that rates will move higher as we turn the corner on 2015. A quick uptick in rates will erode move up home buyer’s purchasing power making it more expensive to own the home of their dreams. On a home loan of $417,000 a ½% change in home mortgage rate can increase the cost of ownership by $200 per month.
Dr. Frank Nothaft, the SVP & Chief Economist for CoreLogic, had this to say in their latest MarketPulse: “If you are thinking of buying a home and have the financial means to do so, this could be a good time to take a look at the neighborhoods you are interested in. We expect home prices in our national index to be up about 4.3% in the next 12 months, and mortgage rates are also likely to increase over the next year.”
If both the predictions of home price and interest rate increases become reality, families would wind up paying considerably more for their next home.
Daren Blomquist, vice president at RealtyTrac reported, “The number and share of equity-rich homeowners across the United States dropped dramatically between 2015 second and third quarters — continuing a trend from the previous two quarters.” You might be thinking, “that can’t be good news”, but according to REaltyTrac, the sharp decline is actually evidence that more homeowners are leveraging their equity through move-up sales, refinancing or by completely cashing out of the housing market.
The key to moving up as affordably as possible is to lock in a low interest rate and sell while there is strong demand by first-time home buyers. Get current rates and estimate your monthly payment on your move up home by contacting a Beverly-Hanks Mortgage Services loan officer.