It may seem hard to imagine that the first home you purchased might not be the home that will allow you to achieve the rest of your dreams. However, first-time home buyers don’t always consider the differences between starter homes and forever homes. A starter home is a great means to enter the market. You spend less now so you can save more and upgrade when the time (and rates) are right. Buying a forever home for your first purchase generally means spending more upfront to care for your needs long term. Both have their advantages, but starter homes are the typical choice for new buyers. This means that admitting your home no longer suits your needs is not only ok, it’s normal.
For instance, common reasons people move out of their starter homes include:
Location – Starter homes aren’t always a good buy in your ideal city or neighborhood. This is a great reason to trade up!
Space – That two-bedroom worked great in the beginning, but if you have kids on the way, or need an extra room for work, you may need to move.
Affordability – If you can afford a bigger investment, upgrading may be the best move financially.
Market Conditions – When mortgage rates are low, it’s always a good idea to take advantage. You just don’t know how long that can last, and the less you pay, and the more your property appreciates, the better the investment.
On the subject of market conditions, CoreLogic’s latest Home Price Index notes that prices in the starter home market have appreciated faster than any other category over the last year, at 9.4%. At the same time, inventory in this category has dropped 14.2%.
These two stats are directly related to one another. As inventory has decreased and demand has increased, prices have been driven up. This is great news if you own a starter home and are looking to move up to a larger home as the equity in your home has risen as prices have gone up. Even better is the fact that there is a large pool of buyers out there searching for your starter home to help them achieve their American Dream!
If you have outgrown your starter home, contact us. We can explain the market conditions in your area and help you find your next home.