Convinced that prices have just begun to rise, many homeowners are waiting for their property value to increase more before selling and moving up to a nicer place. That is likely a mistake.
“If you’re selling one house just to move up to another, it does you no good to wait for prices to rise — the price of the move-up home will increase faster than the price of the place you’re leaving behind,” said Redfin CEO Glenn Kelman. “But waiting until interest rates rise is what can really cost move-up buyers, because most economists believe that rates at some point will go back to historical norms, well above 5%. This means that most move-up buyers are likely to be trading in a low-interest loan on the old place for a higher-interest loan on the new one. In this scenario, the only winner is the lender.”
For the full report visit the Redfin Research Center.