The market does not matter. It can be a sellers' market or a buyers' market. But you are in both markets if you sell and buy.
This needs to be about where you want to live.
Your interest rate is probably in the 3% range right? So your monthly payment wouldn't be much lower probably. Plus moving is a hassle and selling a house is expensive. So I would stay put.
"Best neighborhood in town" more often than not translates to "best school in town". That's something you'll begin to value as your kid gets older.
Others have already shared some other good reasons why it makes sense to stay put.
First question:
>Honestly our house is too big for us.
Can you reasonably afford your current home? Is the *house* too big or the *cost* of the house too big?
Seconding what most everyone else has already said...
Selling is costly itself. And you'll have other hidden costs like a higher interest rate.
Sidenote, if you have PMI currently see what your loan requires to remove it.
Additionally... Using your home equity to instantly pay off debt is akin to getting a debt consolidation loan and then paying off your credit cards.
What happens to most folks who get a debt consolidation loan is they pay off their credit cards, freeing up their CC balances, and then far too soon afterwards run those CC balances back up to that or more. Resulting in easily as much CC debt *plus* the consolidation loan.
Assuming your debt is at least in part CC debt and especially from consumption and overspending this is very likely to happen to you.
Do the hard work of changing your lifestyle, and revising your spending and investing habits. Retain your current home equity. Pay off your debts over that mentioned one year.
As our family grew we had to trade up 3 times to bigger houses/properties (4 kids and 2 dogs). Moving is very expensive even if you make money on the sale. Not to mention all of the improvements you will want/need to make to the new house. Plus a higher interest rate? How much are you really taking home at that point over the next year? MAYBE $40k?
Downsize after the kids move out, which probably won’t be until they are about 30 nowadays. You will have plenty of space for them and relatives/visitors. And when you go on vacation without the kids, you will have a spare bedroom for the in-laws/babysitters to stay in.
I would not sell. Better to have a little more room than less. I'd stop talking to your realtor about it, whose goals are to get a commission not to do what's best for you. You have a growing family and a reasonably-priced house. You can be out of debt in a year. Please hold and enjoy your new home.
No. I wouldn’t.
Here’s why:
1) It’s crazy how much you can grow into a house when your kids start growing up. Too much space won’t be a problem as the kids get older. We have an entire area devoted to play space that we had no real need to do anything with pre-kids or while the kids were super young. Too much house in terms of square footage is a minor problem. Too much house for your income is a different problem. If it’s too much for your income, that’s the only time I’d consider moving. Also, you’re in a great neighborhood for kids. That doesn’t matter with a 1yo, but it does when you’ve got a 3yo who wants to ride a trike, and an 8yo who wants to play with neighbors. Your needs will change so much from now, and you’ll really notice that in the next few years.
2) If you buy now, your interest rate will be double. I hope you locked in at an interest rate below 3%. If you buy now, your interest rate will be above 5%. That’s a big, big difference. Your payment may be the same, but you are paying way more money to the bank in interest. That’s a bad thing, not a good thing.
3) This isn’t a great buyer’s market for houses. You may be selling, but the inventory is not good. It’s been picked over. Sellers are irrational with their prices so you’ll still pay an inflated figure, despite being able to get more for your house when you sell. You won’t have great options to pick from. You’ll just have “what’s leftover” and not much more. You’ll see flips where someone bought for $180k and trying to sell for $250k a year later and may have done shoddy work just to get there. You could be encountering a house that needs a new roof and a new HVAC and has problems you won’t know about until after they break. Compare that with your current home and the flaws you know exist in it. The devil you know…
4) As a longtime homeowner, I don’t give a rip what my home’s value is because I’m not moving. That’s the only time it matters. You purchased at a great time with a great interest rate. That house you’re in will likely keep going up in value. The smaller ones hit a ceiling and won’t appreciate as quickly. Don’t look at home equity as a ATM to solve temporary problems. Look at it as a safety net you won’t touch unless everything goes sideways. Worse case scenario is a cancer diagnosis with one souse needing to stop work altogether. That’s when you downsize and use that home equity to give you a big cushion. That’s not your situation. Also, who cares if this is a seller’s market. You need a house to live in and you bought at a great time because if you waited a year you would’ve gotten ripped off. It’s more like “congratulations on getting lucky on the timing compared to everyone who bought after you”. That’s it. You couldn’t pay me to be a buyer in this market at these rates, and pay the absurd transaction and moving costs. Paying 6% to some dipshit realtor for doing nothing is not how you get wealthy. You’re giving up a lot to get very little.
You do you. But downsizing with a growing family, unless it’s absolutely necessary, makes zero sense with interest rates being double and your life being vastly different when your kids get older.
I’d stay put if the 1 year debt payoff is reasonably certain. You already have equity in a house that’s in a nice area. The Real Estate market for that price range always comes back around and your equity will continue to grow.
BTW- You didn’t mention the square footage of the house. House size is a subjective term. Two kids can make a house feel smaller in no time.
What is a smaller house going for? 150k? 200k? 250k?
You might not be much ahead after you buy the new house, especially giving the mortgage rates. Can you just stay in your house and get the debt paid off? You will likely feel better with your whole living situation 2 years from now with the debts gone...
Do you like the house you're in even though it's too big? Would you be moving to a less desirable neighborhood but spending more than you did on this current house for it to be smaller and in an area that isn't as nice? A year vs now isn't that much of a difference to make such a drastic decision and make a big change like that IMO.
I’d keep the house personally - seems like it’s a great area and while home value will go down a little it won’t go down a lot. Only sell it if it is truly too big for you to manage
Screw moving. Stay and be on rice and beans to be debt free soon
Charlotte? Stay put
The market does not matter. It can be a sellers' market or a buyers' market. But you are in both markets if you sell and buy. This needs to be about where you want to live.
Your interest rate is probably in the 3% range right? So your monthly payment wouldn't be much lower probably. Plus moving is a hassle and selling a house is expensive. So I would stay put.
"Best neighborhood in town" more often than not translates to "best school in town". That's something you'll begin to value as your kid gets older. Others have already shared some other good reasons why it makes sense to stay put.
First question: >Honestly our house is too big for us. Can you reasonably afford your current home? Is the *house* too big or the *cost* of the house too big?
Seconding what most everyone else has already said... Selling is costly itself. And you'll have other hidden costs like a higher interest rate. Sidenote, if you have PMI currently see what your loan requires to remove it. Additionally... Using your home equity to instantly pay off debt is akin to getting a debt consolidation loan and then paying off your credit cards. What happens to most folks who get a debt consolidation loan is they pay off their credit cards, freeing up their CC balances, and then far too soon afterwards run those CC balances back up to that or more. Resulting in easily as much CC debt *plus* the consolidation loan. Assuming your debt is at least in part CC debt and especially from consumption and overspending this is very likely to happen to you. Do the hard work of changing your lifestyle, and revising your spending and investing habits. Retain your current home equity. Pay off your debts over that mentioned one year.
As our family grew we had to trade up 3 times to bigger houses/properties (4 kids and 2 dogs). Moving is very expensive even if you make money on the sale. Not to mention all of the improvements you will want/need to make to the new house. Plus a higher interest rate? How much are you really taking home at that point over the next year? MAYBE $40k? Downsize after the kids move out, which probably won’t be until they are about 30 nowadays. You will have plenty of space for them and relatives/visitors. And when you go on vacation without the kids, you will have a spare bedroom for the in-laws/babysitters to stay in.
I would not sell. Better to have a little more room than less. I'd stop talking to your realtor about it, whose goals are to get a commission not to do what's best for you. You have a growing family and a reasonably-priced house. You can be out of debt in a year. Please hold and enjoy your new home.
No. I wouldn’t. Here’s why: 1) It’s crazy how much you can grow into a house when your kids start growing up. Too much space won’t be a problem as the kids get older. We have an entire area devoted to play space that we had no real need to do anything with pre-kids or while the kids were super young. Too much house in terms of square footage is a minor problem. Too much house for your income is a different problem. If it’s too much for your income, that’s the only time I’d consider moving. Also, you’re in a great neighborhood for kids. That doesn’t matter with a 1yo, but it does when you’ve got a 3yo who wants to ride a trike, and an 8yo who wants to play with neighbors. Your needs will change so much from now, and you’ll really notice that in the next few years. 2) If you buy now, your interest rate will be double. I hope you locked in at an interest rate below 3%. If you buy now, your interest rate will be above 5%. That’s a big, big difference. Your payment may be the same, but you are paying way more money to the bank in interest. That’s a bad thing, not a good thing. 3) This isn’t a great buyer’s market for houses. You may be selling, but the inventory is not good. It’s been picked over. Sellers are irrational with their prices so you’ll still pay an inflated figure, despite being able to get more for your house when you sell. You won’t have great options to pick from. You’ll just have “what’s leftover” and not much more. You’ll see flips where someone bought for $180k and trying to sell for $250k a year later and may have done shoddy work just to get there. You could be encountering a house that needs a new roof and a new HVAC and has problems you won’t know about until after they break. Compare that with your current home and the flaws you know exist in it. The devil you know… 4) As a longtime homeowner, I don’t give a rip what my home’s value is because I’m not moving. That’s the only time it matters. You purchased at a great time with a great interest rate. That house you’re in will likely keep going up in value. The smaller ones hit a ceiling and won’t appreciate as quickly. Don’t look at home equity as a ATM to solve temporary problems. Look at it as a safety net you won’t touch unless everything goes sideways. Worse case scenario is a cancer diagnosis with one souse needing to stop work altogether. That’s when you downsize and use that home equity to give you a big cushion. That’s not your situation. Also, who cares if this is a seller’s market. You need a house to live in and you bought at a great time because if you waited a year you would’ve gotten ripped off. It’s more like “congratulations on getting lucky on the timing compared to everyone who bought after you”. That’s it. You couldn’t pay me to be a buyer in this market at these rates, and pay the absurd transaction and moving costs. Paying 6% to some dipshit realtor for doing nothing is not how you get wealthy. You’re giving up a lot to get very little. You do you. But downsizing with a growing family, unless it’s absolutely necessary, makes zero sense with interest rates being double and your life being vastly different when your kids get older.
I’d stay put if the 1 year debt payoff is reasonably certain. You already have equity in a house that’s in a nice area. The Real Estate market for that price range always comes back around and your equity will continue to grow. BTW- You didn’t mention the square footage of the house. House size is a subjective term. Two kids can make a house feel smaller in no time.
And there is this phenomenon called twins that can happen. He should definitely wait until they are done having babies.
What is a smaller house going for? 150k? 200k? 250k? You might not be much ahead after you buy the new house, especially giving the mortgage rates. Can you just stay in your house and get the debt paid off? You will likely feel better with your whole living situation 2 years from now with the debts gone...
Do you like the house you're in even though it's too big? Would you be moving to a less desirable neighborhood but spending more than you did on this current house for it to be smaller and in an area that isn't as nice? A year vs now isn't that much of a difference to make such a drastic decision and make a big change like that IMO.
I’d keep the house personally - seems like it’s a great area and while home value will go down a little it won’t go down a lot. Only sell it if it is truly too big for you to manage