Moving up Comes with Cost

Whether it’s because of a growing family or need for more space, upgrading to a larger home comes with a price-in some cases, as much as a 50 percent increase in monthly mortgage payments, said Zillow, Seattle.

The company’s Cost of Moving up Analysis reported nationally, families can expect to spend $447 extra a month moving to a three-bedroom home from one with two bedrooms. In some parts of the country, said Zillow Chief Economist Svenja Gudell, that’s the equivalent to a 50 percent increase in their monthly mortgage payment.

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

Zillow said move-up buyers in the Midwest 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, the report said. 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. Gudell said gven this premium, adding an extra bathroom to an existing home may be a cost-effective option for some families.

Zillow said 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.

“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,” Gudell said.