Millions of people are in forbearance in the United States. This means their mortgage payment is partial or zero for a agreed time period. These forbearances will be ending this Feb., March & April. What will that mean to the housing market?
Millions of people refinanced their homes to a lower rate in 2020. That was a smart move but, has since caused a sunk cost bias to many of Americans.
A Sunk Cost Bias is when you spend time, money, or effort on something and feel like you can’t let it go to waste. This is a bias because even when faced with a greater opportunity a person with this bias will ignore the greater opportunity because of the cost they have already spent where they are at.
For homes, owners refinanced their homes. This refinance cost them around 1% of the loan amount. Sometimes 2% of the loan amount. The homeowner has a sunk cost bias. They are not considering selling their home that is worth 22% more money now because they want to maximize the return on the refinance.
Little do they know they are missing out on 2X, 3X more equity if they sold and bought a new house.
Here is the deal that I’m making you today. If you refinanced your home in the last 12 months we will reimburse you for your refinance loan origination at closing upon listing and selling your home with our team.
First things, first… Find out how much we can sell your home for in today’s market. Prices are up 22% in the last 12 months so, you really don’t know the true value without our help.
Next, find a superior replacement home for your lifestyle and family.
Nick McLean Real Estate
Or Call our team at 509-255-8070