A Seller's Market Creates Opportunities
April 5, 2016 / Valerie Tucker Ausband, Regional Vice President—Southeast Region
Opportunities are being created for homeowners as prices reach their highest values since 2007. Many media reports focus on the challenges that home prices and tightening inventories provide for home buyers, but those conditions can also become strong positives for long-time homeowners who want to buy a new home.
Selling a house in a hotly competitive market can mean solid price appreciation for the seller. But not all sellers will funnel all of the cash proceeds from a home sale into a down payment on their next home. Some move-up buyers can use mortgage insurance as a flexible option to free up cash from their home sale for a variety of needs, including:
- Maintaining a family emergency savings fund. Many financial experts advise families to keep enough savings to sustain a family for three to six months to protect against a job loss or illness.
- Paying for renovations, furniture, or other items without taking on additional debt at high interest rates.
- Investing in home improvements that provide quick payback by lowering energy bills, such as energy-efficient windows and insulation projects.
In addition to MI premiums, deductibility of mortgage interest was also approved for 2015 and extended through 2016. For those interested in purchasing a home in 2016, these deductions add to the benefits of being a homeowner rather than a renter.
Many homeowners considering a move may be surprised by how much their home price has appreciated in recent years. Home prices increased 5.7 percent in 2015 to an average of $182,750—a level that hasn’t been seen since late 2007 according to the S&P/Case-Shiller 20-City Index.
Because many long-time homeowners seem unaware that prices have been rising quickly for several years in many markets, too few “For Sale” signs are being posted throughout the country. That has worsened tight inventory conditions and frustrated many first-time buyers. Rising prices can provide benefits for many sellers, including:
- Older couples who want to scale down to a smaller home or condo but have held off waiting for the market to recover.
- Younger couples who own homes and could leverage the current market to move to a new home with a shorter commute, better amenities, or more room.
- Long-time renters seeking the ability to build equity and benefit from any future increases in home values.
This spring can usher in lots of opportunities for both sellers and buyers if we can help sellers unlock the potential the current real estate market offers. Let’s all do what we can to encourage more “For Sale” signs to go up in our neighborhoods.
Valerie Tucker Ausband is United Guaranty's Regional Vice President for the Southeast. She has more than 20 years of mortgage industry experience. Valerie joined United Guaranty in 1999 as an Account Executive after having served in a similar role for an Atlanta-based title company. Valerie was named United Guaranty's Vice President for National Accounts in 2004, and she was promoted to Regional Vice President in 2006. Ausband, who lives and works in the Atlanta area, is a graduate of the University of Georgia. She has earned the Accredited Mortgage Professional (AMP) designation from the Mortgage Bankers Association. She is active with the Mortgage Bankers Association of Georgia and has held a number of leadership roles in the organization over the years.
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