Trade-up Buyers Empowered by Improved EquityBlog, Buying, Real Estate Tips
A very encouraging trend in the real estate market is the rising participation of trade-up buyers. Housing demand by trade-up buyers is rising as the home equity available to these prospective buyers is improving. On the demand side, steadily rising home prices and an expectation of continued recovery have stimulated housing turnover by prospective buyers who are in a position to take advantage of low home prices. In the meantime, higher home prices are bringing out trade-up demand from existing homeowners who are experiencing rising home equity, which supports a down payment on their next bigger house. An important sign of a healthy and sustainable recovery is increased housing turnover driven by trade-up buying, which is more or less discretionary spending. According to FNC’s Foreclosure Market Report, the foreclosure market has rapidly improved in recent months with foreclosure rates approaching pre-crisis levels – an indication of strengthening supply-side conditions. The report shows that foreclosure price discounts, which compare a foreclosed home’s estimated market value to the price paid by investors or home buyers, have dropped to a 10-year low.