Smaller homes have seen significant price growth over larger ones, and that means some homeowners may be sitting on a lot of equity – more than they may realize. With mortgage rates still low by historical standards but expected to edge up soon, homeowners with equity in their current home may find this is the perfect time to trade up into a larger one.
In many markets, move-up buyers will also find more choices in the higher price ranges. Housing supplies have increased nearly 8 percent 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 more money from their home sale to use for their next downpayment. And move-up sellers may be more motivated to choose a higher offer over a speedier close, says Lawrence Yun, the chief economist for the National Association of Realtors.