In the last 18 months, buyers' preferences have changed. An AIA survey of home design trends was recently released for Q3 2021 by the American Institute of Architects. It found that:

  • 70% of respondents want more outdoor living space
  • 69% of respondents want a home office (48% wanted multiple offices)
  • 46% of respondents want a multi-function room/flexible space
  • 42% of respondents want an au pair/in-law suite
  • 39% of respondents want an exercise room/yoga space

Albuquerque homeowners who wish to add any of the above options have two options: renovate their existing homes or purchase a home that already contains those features. You may be influenced by factors such as:

  • Possibility of relocating
  • The cost difference between renovating and buying
  • Find an existing house or design a new one that has exactly what you want (rather than trying to rearrange your current house)

Regardless of the outcome, you'll need access to capital: either for the renovation or the down payment on your next home. You probably have the money you need in the form of equity in your home already.

Home Equity Is Skyrocketing

Over the last two years, home prices have risen at a record pace, improving homeowners' equity dramatically. Odeta Kushi, Deputy Chief Economist at First American, quantifies the amount of equity homeowners gained recently:

“Remember U.S. households own nearly $35 trillion in owner-occupied real estate, just over $11 trillion in debt, and the remaining ~$24 trillion in equity. In inflation adjusted terms, homeowners in Q2 had an average of $280,000 in equity- a historic high.”

If you own a home, you may have the funds to purchase the perfect home or renovate your current home. However, if you wait to decide, the cost of tapping that equity may increase.

Renovations will require you to refinance (or take out a home equity loan) to access the equity. In the event that you decide to move instead and use your equity as a down payment, you will still need a mortgage to cover the difference between the down payment and the price of your next home.

Over the next year, mortgage rates are expected to increase. You will probably pay more if you wait to leverage your equity. Most current mortgage borrowers have a rate of less than 4%, according to the latest Federal Housing Finance Agency (FHFA) data. By taking action now, you can keep your mortgage rate below 4% if you're one of those homeowners. If you're among the 43 percent of homeowners with a mortgage rate over 4%, you may be able to refinance for a cash-out or buy a more expensive home without significantly increasing your monthly payment.

Calculate your home's equity

To determine how much equity you have in your current home, or to find a constructed or existing home that has everything you need, you first need to determine how much equity you have in your current home. You will need two things for that:

  • The current mortgage balance on your home
  • The current value of your home

If you have a monthly mortgage statement, you should be able to find your mortgage balance there. You can get an appraisal for several hundred dollars, or you can get an equity appraisal for free from a professional local real estate agent.

If the past 18 months have refocused your thoughts on what you want from your house, now may be the time to either renovate or make a move to the perfect home. Contact the Sandi Pressley team to help you decide what the best way to move forward if you decide to buy a home in Albuquerque.

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Learn More!

Contact us today to help you buy or sell your next home in Albuquerque. Looking for the perfect home for sale in Albuquerque? Our easy-to-use home search tool can help you start the process. Join us twice a week on our blog for more real estate advice and great reasons to buy a home in Albuquerque and the surrounding area. Follow us on Facebook for the latest Albuquerque real estate updates.

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