A red-hot housing market is pushing home values to new highs, and a subsequent increase in equity wealth is motivating some homeowners to relocate, according to The New York Times. In the first quarter of 2022, 44.9% of all homes in the U.S. were considered “equity-rich,” meaning that the loan balances secured by those properties were no more than 50% of their estimated market values.
While many equity-rich homeowners are staying in place rather than selling their homes and entering into an unpredictable buying frenzy, others are opting to cash out and move to more affordable markets. Over a third of all U.S. home sales in the fourth quarter of 2021 were cash purchases, an unprecedentedly high share in a particularly pricey market.
“What we believe is happening is that people are leaving high-cost, high-tax states, grabbing the equity and buying a house in a low-cost state,” Mr. [Rick] Sharga said, adding that more than a third of U.S. home sales in the fourth quarter of 2021 were cash purchases, higher than usual.
But as mortgage rates creep up, some homeowners who already have low rates are staying put. “It’s being driven by boomers wanting to age in place,” he said, with more owners investing in home repairs rather than selling. “That inventory is not coming back to market.”
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