Must-Move Buyers Tap Home Equity as 13% See Buying Realistic

Only 13 percent of U.S. homeowners say buying a new home feels realistic in today's economy, yet relocations and family changes force many to move anyway, pushing them toward home-equity lines of credit and bridge loans to close the timing gap.

"For homeowners who need to sell one home and buy another, the challenge is often less about completing a transaction and more about managing the gap between two transactions that rarely align perfectly," said Raman Muralidharan, president of mortgage banking at Citizens.

A Citizens report found 63 percent of homeowners are likely to need financing for a home purchase or improvement within five years, while 39 percent say they do not understand how financing options work and 27 percent are unfamiliar with home equity or have not explored using it. About 40 percent of HELOC applications at Citizens reach final approval in 10 days or less, helping borrowers act without prolonged uncertainty.

The stakes are high because elevated mortgage rates and limited inventory mean homes may sell quickly while finding the next property drags on, forcing interim housing or dual payments. Buyers who understand their options are better positioned to move without compromising long-term financial health.

The Gap Between Selling and Buying

Many buyers begin the process with a strategic, financially focused approach, with affordability a top concern. Yet market conditions frequently prompt a pivot: homes might sell quickly, while limited inventory and competition make finding the next property significantly more difficult. For must-move buyers, the difficulty is rarely completing a single transaction but sequencing two that rarely align, creating the need for interim housing or temporary financing.

This knowledge gap can complicate an already complex process. Beyond finding the right home, buyers must evaluate loan options, compare costs, and manage timing — all while dealing with uncertainty around rates and inventory.

Home-equity products let homeowners borrow against value built in their current property. A HELOC's draw period allows borrowers to pace principal and interest repayments, smoothing cash flow in early repayment years, while a home equity loan provides a lump sum against the same equity. These options prove useful when a competitive market makes the purchasing timeline hard to pin down — for example, a buyer relocating for work with a defined timeline to sell and secure housing in a new region.

Weighing Bridge Loans and Contingencies

Bridge loans provide short-term financing that bridges the gap between buying a new home and selling the current one, giving buyers funds to make an offer before their existing home closes. But they open the possibility of carrying two housing payments at once, causing financial strain. Sale contingencies are an option, though most sellers prefer to avoid them.

Buyers can also strengthen their position by obtaining a fully underwritten commitment letter from a lender, which verifies income, credit, and debt-to-income ratio before making offers.

Understanding these risks is key to decisions that position buyers financially beyond the moment of moving. In today's market, buyers who build a trusted team of advisers — real estate professionals and lenders — early in the process, and who anticipate setbacks and consider temporary housing if necessary, are better positioned to navigate the market thoughtfully even when waiting is not an option. Because mortgage rates and loan terms change frequently, borrowers should verify current rates and product details against the latest official announcements from their lender.

This article is for informational purposes only and does not constitute professional or investment advice.