Baby Boomers: Time to Cash Out Your Home
It has never been a better time to cash out your home’s equity and Baby Boomers are the age group poised to benefit the most from today’s housing market.
Preserving one’s wealth is the most important action you can take. Baby Boomers who have been fortunate to experience property appreciation and have not taken the equity out of their homes, should be thinking about ways to reap the benefits and create other opportunities for wealth building without incurring more debt.
Up until October of 2021 the pattern of contracts for the resale of homes priced over $500,000 was approximately $20,000 to $30,000 over listing price. From then until the present homes priced over $500,000 are commanding resale prices of $75,000-$125,000 over listing price.
If you want to take advantage of your one asset that has appreciated the most in your lifetime you might want to consider selling your home now because the train is about ready to leave the station.
Since February of this year interest rates have increased 2 ½ %. For every 1% increase in the home interest rate a buyer loses $10,000 of buying power for every $100,000 borrowed. If a buyer is comfortable making monthly mortgage payments on a $500,000 mortgage and interest rates go up by 1% point that same mortgage payment will translate to a $450,000 mortgage.
A 2 1/2 % rate increase will decrease the equivalent mortgage to $375,000. This is great news for buyers and terrible news for sellers.
Consider this. Inflation affects everyone’s life in a negative way. Some economists are saying that the only way to stop inflation is to raise the interest rate higher than the inflation rate. The inflation rate now is approximately 8%.
Three or four months from now you probably don’t want to say to yourself, “If only I sold my house.”
Stay healthy and safe and look for those great opportunities. Contact me to assist your search…
Interested in more home buying advice and in exploring opportunities in South Jersey? Be sure to follow our Facebook page!