‘Moving up’ to a bigger home costs borrowers an extra $447 a month

Upgrading to a larger home comes with a premium in most major metros. Nationally, families can expect to spend $447 extra a month moving to a three-bedroom home from one with two bedrooms, according to Zillow’s Cost of Moving Up Analysis. That equates to a 50 percent increase in their monthly mortgage payment.

U.S. families most often seek a three-bedroom home with 2.5 bathrooms. However, more than a third (36 percent) of these buyers go over budget on their home purchase, according to the Zillow’s Consumer Trends Report. To help buyers better prepare this home-shopping season, Zillow identified how much extra move-up buyers could expect to spend on their mortgage if they were to upgrade to a similar home with just one extra bed or bath.

In many coastal markets, moving from a two to a three-bedroom home costs around $500 extra each month. However, in hot markets like San Francisco and San Jose, families can expect to nearly double their monthly mortgage payment, with the premium on moving up exceeding $1,600.

Move-up buyers in the Midwest will see their dollars stretch further. Families in Chicago, Cincinnati and St. Louis can expect to spend just $150 more on their mortgage when upgrading from a two to a three-bedroom home. Cleveland offers the lowest premium out of all the metros analyzed, with move up buyers paying just $74 extra a month to upgrade to a three bedroom.

Bathroom count can also impact a home’s price. Nationally, upgrading to a house with the same number of bedrooms, but with one extra bathroom can cost buyers between $386 and $838 extra a month, depending on the home size. Given this premium, adding an extra bathroom to an existing home may be a cost-effective option for some families.

“While deciding whether to move is a personal choice, understanding how certain characteristics like size, location, or number of beds and baths, can impact a home’s price can be hugely important when determining if a particular home is the right fit for you and your family,” says Dr. Svenja Gudell, Zillow chief economist. “Even though many families may be prepared to spend extra for a larger home, just how much more may come as a surprise, especially for those living in coastal markets.”

About Mike Wheatley

Mike Wheatley is the senior editor at Realty Biz News. Got a real estate related news article you wish to share, contact Mike at mike@realtybiznews.com.