In 1962, Elvis Presley recorded “Home Is Where the Heart Is.” While that’s still true today, home is also where the low-cost mortgage is.
A 2024 survey found:1
- 79% of borrowers have a mortgage rate below 5%.
- About 60% have a rate below 4%.
- Nearly 23% of homeowners have a mortgage rate that’s below 3%.
Every homeowner wants a low-cost mortgage. But the trouble is, mortgages are non-transferable. So, in some instances, a low-cost mortgage can become an economic and emotional anchor, holding homeowners back from making decisions that may be in the best interest of their family.
“For every house is built by someone, but God is the builder of everything.” Hebrews 3:4
Fun fact: Among U.S. homeowners, home equity accounted for a median of 45% of their net worth in 2021.2
But clearly Americans want to move. Each time mortgage rates ticked lower in 2024, activity tended to pick up. In December 2024, for example, when fixed-rate mortgages dipped, mortgage applications accelerated.3
In our experience, here are some of the top reasons people decide to move.
- Needing a bigger space, or wanting to downsize. As you can imagine, growing families often look for a bigger space or a different school for their children. On the other hand, empty nesters often look to move into a more manageable space.
- Family-related decisions. Moving closer to family can be a driver of changing homes. A shorter drive to visit grandchildren can be a powerful force!
- An inheritance. When a windfall changes a person’s economic status, that can lead to a variety of new ideas, including where to live.
- Work-related opportunities. While some jobs are remote these days, other companies need an employee to relocate. That can sometimes happen quickly, or in some instances, the company can allow for a transition period.
The decision to move from your family home can be an emotional one, so we encourage you to give careful thought and prayer as you evaluate your choices.
If you are just starting down the path on considering a change, we want to remind you that we are associated with companies that can offer insights into the mortgage rates and real estate trends. For many of our clients, their primary residence is one of their most valuable assets, so we want them to have as much information as possible as they consider any future steps.
Pro tip: As a rule, we believe there is a maximum percentage of your income that should be spent on housing. And when we say housing, we consider a mortgage payment, property taxes, and homeowners’ insurance as well as other expenses–such as electric, water, gas, maintenance and other payments–as part of “housing.” Often, banks will allow a homeowner to spend as much as 28% of their monthly gross income on a mortgage payment. But when you add in all the other items, that 28% can quickly turn into more than 40%. Our guidance is to spend about 18% of income on ALL housing expenses.4
- RedFin.com, January 12, 2024
- PewResearch.org, December 4, 2023
- RealEstateNews.com, December 5, 2024
- Chase.com, 2024
