A recent study revealed that the number of existing home owners planning to buy a home this year is about to increase dramatically.
Some are moving up, some are downsizing and others are making a lateral move.
Another study shows that over 75% of these buyers will, in fact, be in that first category: a move-up buyer.
There is no way for us to predict the future but we can look at what happened over the last year.
Let’s look at buyers that considered moving up last year but decided to wait instead.
Assume they had a home worth $300,000 and were looking at a home for $450,000 (putting 10% down they would get a mortgage of $405,000).
By waiting, their house appreciated by approximately 10% over the last year (based on the Case Shiller Pricing Index).
Their home could now sell for $330,000.
That would mean an additional $30,000 in equity assuming they didn’t incur any expenses in selling the home.
But, the $450,000 home would now …