The Homebuyers Who Can't Wait: How To Navigate A Difficult Market

For many homeowners, today's housing market feels like a stalemate. Elevated mortgage rates and limited inventory have left many people choosing to stay put rather than make a move.

A recent report from Citizens, where I am the head of Mortgage and Consumer Lending, found that only 13% of American homeowners say that buying a new home feels realistic in the current economic environment.

But not everyone has the luxury of waiting. Job relocations, family changes and caregiving responsibilities continue regardless of market conditions. For these "must-move" buyers, the question isn't whether to act, but how to move forward in a difficult market.

Many begin the process with a strategic, financially focused approach. Affordability remains a top concern. However, market conditions frequently prompt buyers to pivot.

Many buyers enter the process expecting their current home to be the biggest hurdle. Increasingly, we're seeing the opposite. Homes might sell quickly, while limited inventory and competition make finding the next property significantly more difficult.

Managing the 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.

Navigating this environment requires flexibility. A clear understanding of the financing and liquidity tools available can help bridge those gaps, but many buyers aren't sure where to start.

The same report from Citizens reveals that 63% of homeowners are likely to need financing for a home purchase or improvement within the next five years, yet 39% say they don't understand how financing options work.

In addition, 27% are either unfamiliar with home equity or have not yet explored how to use it.

Lots to discover

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.

For those who need to move quickly, liquidity and flexibility are critical. Some buyers are exploring ways to tap into their existing home equity, including home equity lines of credit (HELOCs) and home equity loans.

About 40% of HELOC applications at Citizens reach final approval in 10 days or less, helping borrowers act decisively without prolonged uncertainty.

These options allow homeowners to borrow against the value they've built in their current property, which can be useful when the competitive market makes the purchasing timeline difficult to pin down.

For example, a buyer relocating for work might have a defined timeline to sell the current home and secure housing in a new region. Too often, those timelines don't align.

A home might sell quickly, but a lack of suitable options can delay the purchase of the next property, creating the need for interim housing or temporary financing solutions.

In these situations, accessing home equity can help bridge liquidity gaps and reduce pressure to make rushed decisions.

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 they begin making offers.

Explore your options

That said, home-equity products and a strong position in the market aren't the only paths toward a successful transaction, and they don't come risk-free. Sale contingencies are an option, but most sellers prefer to avoid them.

Alternatively, buyers who want to hold on selling their home before buying can consider a bridge loan, which is designed to provide short-term financing that "bridges" the gap between buying a new home and selling the current one, giving buyers the funds to make an offer before their existing home closes.

That opens the possibility of carrying two housing payments at once and causing great financial strain. The flexibility of a HELOC's draw period allows borrowers to pace principal and interest repayments, which can be useful for smoothing out cash flow in early repayment years.

Understanding these risks is key to making decisions that will best position the buyer financially, far beyond the transactional moment of moving.

Easing the strain

Even when equipped with solid information, buying a home under pressure can be difficult. Practical guidance and realistic expectations can help buyers make more confident decisions.

In today's challenging market, buyers should build a trusted team of advisers — including real estate professionals and lenders — early in the process. They can also anticipate setbacks and consider temporary housing if necessary to avoid compromising on their goals.

When buyers fully understand their options, they are better positioned to make decisions that support their long-term financial health.

While some experts suggest the housing market is at a standstill, the must-movers prove that the market hasn't shut down completely. People are still buying homes, just with a stronger need for reliable guidance when timing isn't ideal. They want to understand every possible financial risk before listing.

In this landscape, buyers who take the time to understand their financing options and plan for liquidity are better positioned to navigate the market thoughtfully, even when waiting isn't an option.

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This article was written by and presents the views of our contributing adviser, not the Kiplinger editorial staff. You can check adviser records with the SEC or with FINRA.