Many homeowners say they plan to use the proceeds from the sale of their current home to fund the downpayment of their next home – and some are holding off selling in hopes that prices will continue to rise and they’ll be able to sell their home for an even higher price, according to a consumer housing sentiment study from CoreLogic and RTi Research.
Two out of three (66 percent) homeowners who are considering buying in the next 10 years say they’ll need to sell their current home to finance their next one. Thirty-five percent of recent homebuyers said they used funds from the sale of their previous home to finance the downpayment on their current home.
“In some markets, homebuyers and sellers are remaining cautious and taking a pause as price appreciation continues to rise,” says Frank Martell, president and CEO of CoreLogic. “By waiting to sell, homeowners believe they will get the greatest return on their investment; the more money they have for a downpayment, the easier the purchase payments will be for their next home.”
CoreLogic reported through its Home Price Index that home prices rose nationally by 5.5 percent year over year in August, and prices are projected to increase by another 4.7 percent by August 2019.
However, homeowners who wait to upgrade may also need a bigger downpayment if the cost or their larger dream home also continues to go up.
Source: “Home Price Insights,” CoreLogic (Oct. 2, 2018)
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