Saturday, May 6, 2017

Signs That You’ve Outgrown Your Home (and What to Do Next)

by Allison Hendricks April 25, 2017 Home Buying/Selling

Families grow, careers change and unexpected life events can cause you to realize that you’re running out of room in your home. The situation you were in when you purchased your first home may have drastically changed, no longer making your space comfortable or compatible for your current needs. Whatever your unique situation is, you may currently be realizing that you’ve outgrown your home and need to upsize for more space for you or your family.

We’ve got your back with personal and professional insights from real estate agents and home financial specialists who have outgrown their homes and who’ll share the determining factors that influenced them to upsize their space.

Running Out of Room


The most obvious indicator that you’ve outgrown your home is the realization that you simply need more space. The “starter home” that you moved into as a single person or newlywed might be getting a little tight as time goes on.

More Kids than Bedrooms

Perhaps your home was ideal for a single person or small family, but now you have more kids than your bedrooms can comfortably hold. Not to mention, you may find yourself tripping over toys and sports equipment because you’ve run out of storage space.

Carolina Barefoot, a REALTOR® at Illustrated Properties, experienced this when she had her first set of twins. The family moved from a tight one-bedroom apartment, barely able to fit a stroller, to a two-bedroom apartment with ample storage and perks for kids, like a pool and playroom.

However, after her second set of twins arrived, her family had to move once again, this time to a large home that would fit the entire family.

“Perhaps your yard space feels tight, and you need another garage bay for the hulk of a minivan that you needed to buy once the second set of twins arrived,” Barefoot jokes. “Not to mention all the bikes and scooters that come with raising a tribe of toddlers.”

Furniture Fiasco

Toys might not be the only things you’re tripping over. How many times have you stubbed your toe on a piece of furniture or bumped your hip into the corner of your counter? Or as Barefoot phrases it, “Your once clear hallway is becoming a veritable minefield.”

Additionally, over the years you may have stuffed furniture or other miscellaneous items into storage and find yourself running out of storage space.

Are You Not Entertained?

You may also want to entertain friends and family at parties or during the holidays but realize that you lack the space for larger events and adequate seating. Families are constantly growing with new relationships and new children. If Thanksgiving is already a tight squeeze and you prioritize entertaining, you may need a new venue.

Unexpected Family Factors


In addition to the lack of space, there are some unplanned events that might occur in your life that would require more space.

Boomerang Kids

If you have “boomerang kids,” young adults who move back home after previously living on their own, you might go from a little bit of breathing room to waiting in line for the bathroom every morning.

While to some, this might be a huge blessing (or worst nightmare), the fact remains that you might have to make room for your returning child. You’ll also have to adjust your empty-nest mindset along with your space; if you turned your child’s bedroom into a yoga studio, you’ll have to move your meditation sessions to a different room.

Aging Relatives

You may have aging parents or other relatives who need health assistance and might not have the financial means to age in place or stay at an elder care facility, ensuring that they might need to move in with family members.

Should you experience this, you’ll not only need to make room for the person or people, but any necessary medical equipment or specialized furniture they may need, and your home may need to include wheelchair accessibility.

All things considering, if you want your boomerang child or aging loved one to move into your home, you may need to upsize in order to make room.

Economic Factors


Not all factors for outgrowing your home are going to be obvious.

In fact, one important perspective to consider is purely financial, suggests John Bodrozic, co-founder of HomeZada, a personal finance platform designed to manage all aspects of your home.

“You might live in a neighborhood where the forecasted home values are not growing and perhaps even shrinking in value,” Bodrozic explains. “The desirability factor of your neighborhood might be decreasing, and therefore, you might want to get out now where you can sell the house for a decent price, but if you wait a few more years, the value might be even less.”

Bodrozic asserts your home is a real state asset, and depending on a combination of economic and neighborhood factors, the estimated value can go up or down. Your city or town might be growing with more people wanting to live there, or shrinking as more people move elsewhere.

“This is part of the real estate asset value you as a homeowner don’t really have control over, but you really want to pay attention to this neighborhood trend on a continual basis,” he explains. “If values are going up, you are growing your equity and net worth because of these market conditions, but if values are going down, your equity is shrinking and you might want to sell sooner before it continues to shrink more.”

Personal Factors


You may also have personal reasons to move to a new home that aren’t based on size.

Long Commutes

If your area is booming or you’ve experienced a recent career change, your commute to work might be a few more miles or minutes than you’d like it to be. This can add up on your car, financially and physically, and you may not want to rack up a hefty gas or maintenance bill on your automobile.

Not Knowing Your Neighbors

There might come a day when you look around your neighborhood and realize you don’t know any of your neighbors, which might have a few different effects on your level of comfort. You may want more people around in similar situations – you might want (or already have) children and are looking for a kid-friendly environment.

You’re Never Home

If you enjoy the city but live in the country, you may want to make the move to somewhere more your speed. On the contrary, you may want peace and quiet and the sounds of horns honking and music blaring might get to you over time.

If you find that you’re rarely home, consider the locations where you spend the bulk of your time. Perhaps you want to live closer to work or your favorite nighttime scene? If you have kids, you might want to live closer to their schools.

In Barefoot’s case, her family opted for a home on a country club facility that provided tons of common space with outdoor activities for her kids like tennis, a pool and easy access to great parks and beaches.

Consider these personal factors when thinking of your current home. If you find your current location doesn’t mesh with your lifestyle or needs, it might be time to move.


You’ve Outgrown Your Home, Now What?


If your home starts to feel crowded, Barefoot advises to act quickly, saying, “You don’t want to move when you can’t bear it any longer.”

She also mentions that a new home might require compromises, like moving to a new neighborhood, having a longer commute to work or moving to a new school district.


“The bottom line is, don’t be afraid to educate yourself on what is on the market,” she suggests. “Talk to a professional REALTOR® and lender to understand what you can afford.”

Tuesday, May 2, 2017

Lack of Down Payment the Top Hurdle Holding Back Would-Be Home Buyers

By Svenja Gudell, Zillow Chief Economist on 


  • Saving for a down payment was a barrier to home ownership for more than two-thirds of renters surveyed in a new Zillow survey, topping other hurdles including qualifying for a mortgage and job security.
  • Still, more than half (63 percent) of renters said they are confident they will be able to afford a home someday, with 25 percent saying they plan on buying in the next three to five years.
  • The majority of respondents (66 percent) said they believe owning a home is necessary to live The American Dream, and 72 percent said they believe owning a home increases their standing in the local community.
Saving a sufficient down payment is the biggest obstacle for renters looking to transition to home ownership, regardless of their age, income, gender or geography – a hurdle likely to get worse for many before it gets better.
Two-thirds of renters nationwide (67.9 percent) cited saving for a down payment as the biggest hurdle to buying a home, according to the first Zillow Housing Aspirations Report (ZHAR),[1] a semi-annual survey of 10,000 Americans seeking insight into their views on home ownership and their housing plans.
Thanks largely to low mortgage interest rates, monthly mortgage payments are generally more affordable than monthly rent payments, making home ownership an attractive financial option for many current renters. But the sometimes hefty down payments required to buy in the first place are preventing many renters from taking advantage of the savings. And rapidly rising home values, combined with interest rates that have also begun to creep up, mean that savings window could close before many are able to take advantage of it.

Down Payments: A Widespread Concern

Difficulty in affording a down payment was universally cited as the top barrier to home ownership by renters in virtually all major demographic groups. It was the top barrier cited by respondents from all 20 major metro regions surveyed. More women (72.2 percent) than men (62.2 percent) cited down payment difficulties as a barrier, but both genders noted down payment affordability as a barrier more than any other factor.
Millennial renters (aged 18-34) were more likely than older Gen X (35-54) and Baby Boomer/Silent Generation renters (55 and older) to note down payment woes – 69.2 percent, 68.5 percent and 64.3 percent, respectively – but all three groups noted down payment challenges more than other choices. Down payment concerns were surprisingly more prevalent among those in the highest income bucket[2] than in the lowest,[3] but again, renters in low (65.9 percent of respondents), middle (70.4 percent) and high (67.3 percent) income brackets all cited down payment struggles more than other factors.
Behind down payment woes, the next-most-commonly cited barriers to home ownership among U.S. renters were qualifying for a mortgage (53.2 percent of respondents said this was a concern) and debt burdens (50 percent). Other factors cited as barriers to home ownership included job security (38.5 percent), the renter not being in a position to settle down (20.1 percent) and complaints about not enough homes being for sale (11.2 percent).
Given the many hurdles that need to be cleared before successfully buying a home even in the best market conditions, it might be somewhat surprising that down payment concerns resonated so strongly with respondents. But in the order of operations that is buying a home, it all starts with securing a down payment, which will help determine a final budget, which will lead to actually finding a home within that budget to purchase, and finally to securing a mortgage and going to closing.

A Closing Window?

Home values nationwide have been growing at a rapid pace for well over a year now – February marked the 55th consecutive month of annual U.S. home value growth and the 18th month in a row in which annual appreciation exceeded 5 percent. But while that growth is generally positive for the U.S. economy overall and for current homeowners in particular, for renters trying to save for a down payment on a home, it can often feel like trying to hit a moving target. A renter saves up enough to put a decent amount down on a home in their price range, perhaps only to find out that home has appreciated in value beyond their means.
And not only is it difficult to determine the right amount to save, renters also have the added challenge of trying to save when they’re already paying more of their income to rent in the first place. As of the end of 2016, the typical home buyer nationwide buying the median-valued home could expect to pay about 15.8 percent of their household income to a mortgage. A typical U.S. renter, unable to take advantage of low mortgage interest rates, should have expected to pay 29.2 percent of their income to their landlord each month – and close to half their income in a handful of very pricey markets. And as the share of income spent on rent rises, saving money for anything – let alone tens of thousands of dollars set aside for a down payment – becomes increasingly difficult.
Finally, even as owning a home retains its financial advantages over renting, those advantages are beginning to narrow. In 2016, typical U.S. household incomes grew 2.2 percent, a slowdown from growth of 3.3 percent in 2015. The mortgage payment on the average U.S. home, on the other hand, grew by 9.9 percent in Q4 2016, up from 6.7 percent in Q4 2015. In other words, rising mortgage interest rates and continued home value growth helped make mortgages less affordable by the end of 2016 than they’ve been in half a decade – a trend likely to get worse.
More than 100 economists and real estate experts nationwide recently surveyed by Zillow said they expect home values to rise another 4.4 percent in 2017 and 17.3 percent, cumulatively, through 2021 (on average). And Federal Reserve projections suggest a 100 basis point increase in the Federal Funds Rate (which influences mortgage rates offered by lenders) over the next year, putting conventional, 30-year, fixed mortgage rates in the 4.75-5 percent range by the end of 2017. This rate is still low by historical standards, but high enough to give some buyers sensitive to small changes in monthly payments pause. So while mortgages look set to remain more affordable than renting for the foreseeable future, the time to lock in as much savings as possible before the gap narrows is right now – as if renters already struggling to save a down payment didn’t have enough to worry about.

Millennial Confidence

Still, the first ZHAR isn’t all doom and gloom. Results suggest a great deal of confidence in the housing market, despite challenges, and an encouraging amount of faith in the importance of home ownership to achieving the American Dream.
Here are some additional highlights from the report:
  • Almost all respondents (90 percent) said they are confident they will be able to stay in their current home for as long as they want. Respondents in Atlanta and Detroit were the most confident.
  • More than half (63 percent) of renters are confident they will be able to afford a home someday, with 25 percent saying they plan on buying in the next three-to-five years.
  • Millennial renters are more confident than any other generation that they will be able to afford a home someday.
  • The majority of respondents (66 percent) said they believe owning a home is necessary to live The American Dream, and 72 percent said they believe owning a home increases their standing in the local community. Millennials believe these two statements more than any other generation.
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[1] The Zillow Housing Aspirations Report is computed from an IPSOS poll which combines sample of 10,000 U.S. adults from 20 U.S. core-based statistical area (CBSA) metropolitans (Atlanta, Boston, Chicago, Dallas, Denver, Detroit, Los Angeles, Las Vegas, Miami, Minneapolis, New York, Philadelphia, Phoenix, St. Louis, San Diego, San Francisco, San Jose, Seattle, Tampa, and Washington, D.C.) age 18+, surveyed online in English. The survey has a credibility interval of plus or minus 1.1 percentage points for all respondents from the 20 U.S. metropolitans and approximately 5.0 percentage points for an individual U.S. metropolitan. Post-hoc weights were made to the population characteristics on gender, age, region, and race and ethnicity. This version of the survey was conducted March 1st – 15th, 2017. For more information about conducting research intended for public release or Ipsos’ online polling methodology, please visit the Public Opinion Polling and Communication page.
[2] Earning $70,000 or more per year
[3] Earning less than $35,000 per year