I’ve crunched the numbers every way possible. If I downsize, I end up paying more due to current high interest rates and inflated home prices. How is anyone able to afford moving in today’s market?
Most people manage by leveraging their home equity.
Hayes said:
Most people manage by leveraging their home equity.
That’s not working in my case. Even all my equity combined won’t cover the cost of a less desirable home in my or any other area.
Hayes said:
Most people manage by leveraging their home equity.
We utilized the equity from our previous home, which we lived in for three years, plus the added value from improvements. It helped us secure our next place last October.
I own a fully paid-off home with over $900k in equity. I lived below my means, applied every bonus and tax return towards the mortgage, and now I invest the majority of my income. I also own a rental property outright.
@Nyle
Same here. We were DINKs (Dual Income, No Kids) for a decade, paid off our home before having kids, and now live debt-free, focusing on saving and investing.
Vale said:
@Nyle
Same here. We were DINKs (Dual Income, No Kids) for a decade, paid off our home before having kids, and now live debt-free, focusing on saving and investing.
Well done! We have double income too, but one kid in college now.
@Nyle
This strategy probably works best with high-value properties in high-cost-of-living areas. I started with a starter home in a low-cost area and now feel stuck.
Baylen said:
@Nyle
This strategy probably works best with high-value properties in high-cost-of-living areas. I started with a starter home in a low-cost area and now feel stuck.
I refinanced my starter home during the pandemic at 2% interest, then saved for a downpayment for a bigger home while renting out the old one at a low rate. It’s all about long-term planning and making the most of market conditions.
Baylen said:
@Nyle
This strategy probably works best with high-value properties in high-cost-of-living areas. I started with a starter home in a low-cost area and now feel stuck.
Even in low-cost areas, homes usually appreciate. Have you not gained any equity, even with renovations?
@Nyle
If you have a mortgage below 3%, it’s not financially wise to pay it off early. Better to leverage that money elsewhere.
@Nyle
I swapped a 2.875% mortgage for a 7.5% one without hesitation because I’m financially prudent. I bought strategically, ensuring good resale potential despite the high rates.
I just bought my first home without the ‘COVID equity’ many gained. Interest rates are high, and it’s not getting cheaper. The stark truth is you need to increase your income or appreciate what you have.
@Reese
I don’t understand why housing prices haven’t dropped. Are people just living beyond their means?
Baylen said:
@Reese
I don’t understand why housing prices haven’t dropped. Are people just living beyond their means?
The reason prices haven’t fallen is simple: demand exceeds supply, keeping prices high. Just because you’re priced out doesn’t mean others are.
@Jordan
Prices have fallen in less desirable areas, but popular areas remain competitive. People with good mortgage rates aren’t motivated to sell.
Baylen said:
@Reese
I don’t understand why housing prices haven’t dropped. Are people just living beyond their means?
Building costs are up due to high wages and material costs. It’s still more expensive to build a new house than to buy an existing one. The basic economics of supply and demand explain why prices aren’t falling.
Baylen said:
@Reese
I don’t understand why housing prices haven’t dropped. Are people just living beyond their means?
Many are locked into low interest rates, which limits available inventory.
@Nevan
I’ve got a sub 2% rate. No way am I moving.
@Nevan
Locked in at 3.75% and renting out my place until I can return.