A hairstylist and his federal contractor wife -- both in their 30s -- lucked out when they bought their small Spanish-style house in January 2020. That was before the pandemic-fueled housing market frenzy pushed up prices. They’ve already amassed substantial equity in the place.

Now, the couple craves larger quarters. But they’re reluctant to trade up to a different house, given that they have a very low-rate mortgage, and a new first mortgage would undoubtedly cost them more in monthly interest charges.

“We’d be fools to trade our sweet 2.5% mortgage for one that would likely be over 6%,” the stylist says.

This couple is now exploring an alternative. They’re now working with an architect to design an addition that would add about 600 square feet to their current property.

“We love to have parties, and it would be great having an ‘indoor-outdoor’ room where we could host friends for brunches and barbecues. Our backyard is large and flat so this would be a relatively straightforward addition,” the stylist says.

The couple has already ruled out tapping equity for the renovation through the classic refinance of their first mortgage, which has more than $300,000 still outstanding. Instead, they’re pondering a home equity line of credit (HELOC), a type of second mortgage that works like a revolving credit line and is secured by a property.

“Of course, the interest rate on a HELOC would be higher than on a plain vanilla refi. But our loan amount would be far smaller. We only need about $30,000 for the addition,” the stylist says.

Demand for HELOC is very gradually building among millennial homeowners, according to Marc Zitelman, a mortgage broker who has worked in the lending field since 2002. He says many young adults, including those with growing families, would like to tap their equity but are reluctant to face the interest rate penalties associated with moving.

“Owners don’t want to disturb that low-rate primary mortgage they have,” he says.

Here are a few pointers for HELOC borrowers:

-- Research the HELOC market.

“It’s best to think through what you want before you shop around for the best type of home loan for your needs,” says Keith Gumbinger, a vice president at HSH Associates, which tracks mortgage markets throughout the United States.

As a first step, buyers can inform themselves through online resources. For instance, Gumbinger suggests that mortgage shoppers seek home loan information through his firm’s website: hsh.com.

-- Don’t settle for a lender offering shoddy service.

Gerri Detweiler, a consumer finance blogger and author of “The Ultimate Credit Handbook,” encourages first-time buyers to seek a lender who will instruct them on the complexities of all types of home loans.

“In just 30 to 60 minutes spent with a friendly lender, you can learn a lot about the fundamentals and maybe even get help to identify and fix flaws on your credit reports,” Detweiler says.

How do you find an empathic lender?

Gumbinger says real estate agents are often a good source for names. But he advises you to look beyond their suggestions.

“If you reach out in your neighborhood, you’ll probably find someone down the street who’s bought a house or refinanced lately. You can also canvass friends and family,” he says.

-- Arrive at your lender’s office prepared.

To save time, there’s no substitute for gathering key documents in advance of your meeting. Ideally, these should include recent pay stubs, your latest W-2s and a couple of years’ worth of federal tax returns, as well as bank and savings account statements.

Gumbinger says an in-person tutorial will help you clarify the whole lending situation and bring it into sharper focus.

What if the lender you contact resists your request for a tutorial? In that case, he says you should move on to another lender.

“You deserve to have all your questions answered in plain English,” Gumbinger says.

-- Look into your credit standing to get the best available mortgage rate.

Under federal law, you're entitled to one free credit report every 12 months from the three largest credit bureaus: Equifax, Experian, and TransUnion. You can easily request these online (annualcreditreport.com).

In addition to your credit reports you'll want to access your "credit scores." Such scores, which draw on data from the credit bureaus, seek to provide lenders with a quantitative measure of credit risk. Most lenders still use FICO scores, pioneered by the Fair Isaac Corp.

You may not need to pay a fee to obtain your credit scores because some banks and credit unions are now offering them free of charge. Another way is to buy them through the Fair Isaac website (myfico.com). In addition, you can also obtain them directly through the three large credit bureaus. FICO scores range from 300 to 850, and the higher the score, the greater your odds of getting the best available rate.

As Gumbinger says, you may want to begin the rate-shopping process with the lender who tutored you on the basics. But he urges you to extend your search beyond the first lender.

“The more the merrier when it comes to rate quotes. But always remember you’re looking for competent service along with low rates,” Gumbinger says.

(To contact Ellen James Martin, email her at ellenjamesmartin@gmail.com.)

A young couple who’d struggled with fertility issues bought a small suburban bungalow in 2020 soon after the pandemic hit. The little gray house was the perfect size for the teacher and her husband, an IT specialist.

But the COVID-19 period brought many surprises --including the birth of the couple’s two sons. Soon the family felt squeezed in their 1,700-square-foot place. Now they desperately wish to upsize to a much larger space with at least one home office and a playroom for the boys.

“If we’d had any idea how fast our family would grow, we never would have picked this little ‘mouse house,’ as we call it. Yet right now, we’re packed like sardines, and it feels intolerable,” says the teacher.

Though the couple are more than ready to upsize to a bigger place, they face two financial barriers. One is that mortgage rates are much higher now than when they bought their bungalow. The other is that property values in their area of choice remain stubbornly high.

“We’re constantly crunching the numbers. But the bottom line is that we need a genuinely great deal to make our trade-up dreams come true,” the teacher says.

Lawrence Yun, chief economist for the National Association of Realtors (nar.realtor) understands the affordability frustrations facing many such young families. As he explains, one root cause is that available homes are still in short supply.

“The lack of inventory is a major constraint to rising sales. Multiple offers are still occurring on about a third of all listings and 28% of homes are selling above list price,” Yun says.

Still, he’s optimistic that conditions will soon improve for growing families like the teacher and her husband.

“Sales in the second half of the year should be notably better than the first half as job gains continue and more favorable mortgage rates are expected,” Yun says.

Another reason for optimism among wannabe move-up buyers is that a gradually increasing number of empty nesters are now selling their large family properties.

“We’re heading into a major demographic shift in housing that will eventually mean that huge numbers of older people will either downsize to smaller homes or move to retirement communities,” says Fred Meyer, an independent real estate appraiser and broker who sells properties around Harvard University.

In fact, Zillow, the Seattle-based firm that tracks housing markets throughout the country, is predicting a “silver tsunami” as more baby boomers put their properties on the market.

In desirable neighborhoods, the generational transition will come as a welcome relief to young purchasers hoping to enlarge their living quarters.

Here are a few pointers for those seeking bigger housing:

-- Seek out highly motivated sellers.

The owners of upscale homes are no different from any other category of sellers: Some are a lot more driven to let go than are others, says Dorcas Helfant, the co-owner of several Coldwell Banker realty offices.

Some owners have no particular timeline pushing them out the door. Such “discretionary sellers” would like to liquidate but are willing to delay their plans in hopes of obtaining a better price later.

Conversely, motivated sellers have well-defined reasons for moving. Besides financial and health issues, there are positive reasons why some empty nesters seek to sell quickly. For example, the birth of a first grandchild can intensify their desire to move promptly to a neighborhood near the home of their grown children.

As a move-up buyer, why should you care if the owners of a home you like are in a rush to sell? Because hurried sellers are much more likely to negotiate in earnest.

If you question sellers on their reasons for moving, many will give you -- or your agent -- candid answers to polite inquiries.

Helfant says it’s usually pointless trying to negotiate with sellers who convey a couldn’t-care-less attitude about their timing. You’re much more likely to strike a favorable deal with people who are eager to move.

-- Don’t rule out listings that have gone stale.

On occasion, genuinely motivated sellers hold out longer than they should, only reducing their overly high list price after becoming desperate.

Their problem is that homes that linger too long on the market become stigmatized.

“It can take a while for some otherwise motivated homeowners to realize they’ve been asking way too much. But if you’re willing to wait, you might be rewarded for your patience,” Helfant says.

-- Consider communities where inventory is increasing.

Despite the likelihood of greater availability of property due to more boomer sales, there are still many tight markets where sellers continue to rule. As would-be trade-up buyers, you could do well to prioritize areas where For Sale properties are more abundant.

“You’ll do better if there’s a great deal of inventory -- which translates to more competition for the sellers,” Helfant says.

-- Keep the focus on your ultimate goal.

“Remember when you trade up, you’re buying for lifestyle. You’re looking for that perfect location, that perfect view or that perfect refuge from the world where you can find peace. For that reason, there are factors more important than price and square footage. That’s why it’s critical to set your priorities carefully,” Helfant says. (To contact Ellen James Martin, email her at ellenjamesmartin@gmail.com.)

A young married couple -- two IT specialists -- sat out the pandemic homebuying frenzy. When they finally entered the market in pursuit of their first home, they were so terrified of overpaying -- or buying a lemon -- that they were extra diligent in their research.

“Like many young purchasers with strict income limits, this couple left no stone unturned when shopping for a property. My experience has taught me that young buyers are particularly keen on gathering information. That’s an excellent trend,” says Victoria Henderson, who helped the IT specialists find a reasonably priced property in good condition.

Only after they’d rejected other properties that were not structurally sound -- including one built on swampland -- did this couple commit to a purchase of a nearly new colonial-style house with space for two home offices.

High mortgage rates and steep home prices, as well as a shortage of inventory in coveted neighborhoods, have made some wannabe owners deeply skeptical about their prospects, according to a new survey by Zillow, the national real estate firm.

The survey’s findings “highlight the gap between Gen Z and millennials’ dream of owning a home and the ability to make it happen,” says Amanda Pendleton, a Zillow home trends analyst.

Indeed, outside of winning the lottery or taking on a second or third job, many young adults fear they’ll never be able to purchase a home, Pendleton says.

Of course, those lacking stable employment or a solid credit history may well be indefinitely precluded from a first home purchase. But even well-qualified buyers must be careful to avoid buyer’s remorse.

Henderson, who hosts a podcast on real estate for the National Association of Exclusive Buyer Agents (naeba.org), urges would-be buyers to be sure to obtain a home inspection on any property they’re seriously considering.

“Rather than waiving their right to an inspection in their contract offer, buyers engaged in a bidding war can opt to have a property inspected at their own expense before submitting a bid,” Henderson says.

Reid Guthrie, an inspector affiliated with the American Society of Home Inspectors (ashi.org), says novice buyers are especially likely to fall for a property that “shows well.” But disenchantment can soon follow.

“Homebuyers are alternately excited, nervous, terrified and hopeful. Those who’ve become emotionally involved with a place must be especially wary,” Guthrie says.

Although a new roof, a new HVAC system and new kitchen cabinets are very positive elements that should impress homebuyers, Henderson says too many young buyers are wowed by relatively superficial kitchen improvements.

“All too often, young buyers fall in love with a house solely because it has new white cabinets and white countertops in quartz or granite,” she says.

Here are a few pointers for first-time buyers:

-- Take as sharp-eyed a look at the property on your first tour.

Obviously, a buyer can learn much more from visiting a home than from simply seeing it on the internet. And resourceful purchasers take full advantage of a visit.

Guthrie, a veteran of the home inspection field, urges buyers to investigate when they see furniture or carpets positioned in unusual ways.

“Sometimes the seller will use throw rugs or pieces of furniture to try to conceal problems or defects,” he says.

In an older home, a peek under wall-to-wall carpeting will sometimes reveal the happy surprise that the carpet is masking hardwood floors in pristine condition. But in other instances, area rugs are used to conceal problems, like wood flooring scarred by pets or the overwatering of houseplants.

-- Seek to measure room sizes yourself.

To make homes look spacious, stagers sometimes clear away all but a few key pieces of furniture per room. And when creating a model home for a builder, they may even bring in scaled-down furniture to give the illusion of enhanced size. To guard against such practices, Sid Davis, a realty company owner in Utah, recommends that buyers bring along measuring devices when touring properties.

“For a fairly nominal price, you can now buy laser distance measuring devices,” says Davis, author of “A Survival Guide for Buying a Home.”

He also suggests you bring to your house tour the measurements of your largest pieces of furniture. This will provide you with a further sense of the scale of a home relative to your belongings.

-- Remember that flowering plants are short-lived.

During the warmer seasons of the year, home sellers have an easy time showing off colorful flowers outside. All year long, they can position flowers artfully throughout a home’s interior.

Color is a natural magnet for buyer interest, and many are swayed by blooming plants. Even so, Davis says would-be buyers should recognize that many of the plants displayed by home sellers will be ephemeral.

“Focus on the bones of the house, not its fleeting embellishments,” he says.

-- Avoid a home inspector with a superficial approach.

Guthrie acknowledges that some in his field are more interested in packing multiple inspections into a day than in doing in-depth checks.

“You’ve got to wonder about any inspector who doesn’t want his clients there when he’s going through the house because it will slow him down,” Guthrie says.

As Davis says, a quality inspector is enthusiastic about discovering the inner workings of a home and can prove invaluable to sharp buyers.

“Hiring a top-notch home inspector isn’t a waste of money. It’s a very prudent expenditure,” Davis says.

(To contact Ellen James Martin, email her at ellenjamesmartin@gmail.com.)