For now, the rate of home price increases continues to soar far beyond expectations.
Federal data on housing price rate increases from the end of 2020 reveal double-digit growth and other impressive trends over consecutive months. At one point, the rate had climbed to its highest level in six years.
Across the nation, and even during the early winter months, the housing market turned heads for how well it performed. Cities like Phoenix were up by nearly 14%, and San Diego and Seattle posted 12% gains. And as a homeowner, you may also be closely tracking your home’s ever-increasing equity.
The unprecedented explosion of home appreciation is rewriting the record books. Existing home sales, for instance, jumped by 20 points year over year, representing the biggest increase since 2014. Buyer competition is as demonstrative. The ratio between sold price and list price inched upward to highs not seen since 2008.
The combination of sustained growth to home prices and historically low interest rates presents current homeowners with an opportunity to ride the waves of success of both market phenomena.
For those who are not thinking about selling, they too can harvest the benefits of today’s robust market conditions. Through a refinance, current homeowners can gain financial flexibility by borrowing at a lower rate.
If you decide to refinance your home, you create breathing room on monthly expenses thanks to the new lower-rate loan. Even a half percent savings on the interest rate can lead to tens of thousands of dollars in savings over the life of the loan. Monthly savings in the hundreds are also possible.
Homeowners can also tap into their home’s increased equity through a cash-out refinance. By refinancing your mortgage and pulling out cash, you can finance a major expense right now, reinvest in real estate or provide for a college fund. Many homeowners decide to refinance to fund dream home projects, like a new kitchen or other remodeling.
Refinancing during this advantageous time can also shorten the term of your loan. Homebuyers can switch from a 30-year loan to a 15-year term. This will increase the monthly bill, but will save the homebuyer from paying years in interest.
To learn more about refinancing your home, please do not hesitate to reach out to learn more about the possibilities of financial flexibility.