How The Housing Slump Could Be To Your Advantage
Those needing a larger home or folks that desire a house in a better neighborhood may soon get their chance to trade up on an affordable home. However, when they sell their existing home, they will likely get a less than stellar price.
Since the second quarter of 2006, real estate has fallen 10.2%, as measured by one National Home Price Index. But the new, grander house will also be relatively inexpensive, so those folks will effectively increase their real-estate exposure when the market is well below its peak.
Unfortunately, the new home will probably result in a bigger mortgage and higher ongoing costs, including homeowner’s insurance, property taxes and maintenance expenses. These ongoing costs will offset a large chunk of any future home-price appreciation.
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