Sticker shock over home prices is a recurring event in today’s market. The trend is just not letting up, but it’s also an opportunity.
Homebuyers, home sellers and homeowners watch in awe as home pricing reaches new historic levels.
For the first time since 1992, home price growth year over year reached over 12%, according to the Mortgage Monitor. Considering how quickly the real estate market ascended this past year, the record-breaking performance is no surprise. The housing survey, however, noted that the sales of condos, which usually appreciate faster than single-family homes, lag behind even as the market remains hot.
In another survey of ZIP codes across the United States, price appreciation showed more strength, increasing by about 15% year over year. As of early this year, nearly 80% of the surveyed communities reached strong or hot market status. Real estate markets characterized as being soft or weak were nearly nonexistent in the survey.
Historically low interest rates played a role in the direction of the market. Even now with some modest increases to the costs of financing a home purchase, home appreciation isn’t losing much of its pacing.
In today’s seller’s market, homeowners are presented with a once-in-a-lifetime opportunity to maximize their home equity through a cash-out refinance or home purchase upgrade.
The possibilities are endless given the record-breaking performance of home prices and home appreciation. With a cash-out refinance, homeowners can take advantage of today’s low rates and their ultra-high home equity. Combined, homeowners can pay a little more on their monthly mortgage and secure a lump sum of money to use as they see fit.
The loan amount is simply added to the principal owed so there’s only one bill a month to worry about.
If now is the time to make some home repairs or to take a family vacation or invest in something big, a cash-out refinance is an effective tool that makes the most out of your market position.
Homeowners can also sell their homes, pay off their remaining mortgage balance and then use earnings from the home sale toward a down payment for an upgraded home or one that better suits the family’s needs. With the right team, you can pull off both transactions concurrently, saving you time, money and stress.