Trading Up

A buyer is said to be trading up when he or she purchases a home that is more expensive than the home he or she currently owns. Buyers may be trading up for several reasons. For example, the dynamics of a family may have changed, which creates a need for a bigger home. Getting married or having a baby are two common factors. Alternatively, a buyer’s circumstances may have changed, which now enables him or her to afford a more expensive home. One example of changed circumstances is when one has finished graduate school and obtains a well-paying job. The increased salary can be used to pay for a larger home. During a good economy, many homeowners consider trading up because interest rates are reasonable, and they view it as a perfect opportunity to expand into a larger home.