At first glance, it is the chance of a lifetime for home ownership, so where are all of the buyers?
Unemployment and uncertainty about the future are reasons some buyer’s state.
Before the tax credit cutoff of April 30th, interest rates were about one percentage point high. Buy today, and the average savings on a $250,000, 30 year fixed mortgage would be $54,993 over the life of the loan!!! This is remarkable!
If you had purchased this home for $250,000 in July of 1980, your approximate principal and interest payment would have been $2,610 based on an interest rate of 12.19%. If you purchased this same home today for the same price, your approximate principal and interest payment would be $1,266 based on an interest rate of 4.59%. That is a savings of $1,344 per month or you could buy a $515,000 home today for that same $2,610 per month!!! WOW, that is incredible!
(These figures are only for demonstration, call a lender for more accurate calculations)
Below are the average 30 year fixed rate mortgage rates in July of the last 4 decades. This shows just how affordable home ownership is in today’s market!
July 1970 7.00%
July 1980 12.19%
July 1990 10.04%
July 2000 8.14%
July 2010 4.59%
Add to this, the fact that there are some great move-in ready homes on the market, appraisal guidelines have finally been adjusted giving appraisers more flexibility to set values that reflect the current market and there are many financing options available to buyers, WHY WAIT? You could own a home for less than you are paying in rent!
When I look back at 1983 when my husband and I purchased our first home and interest rates were nearly 13%, I would have been thrilled to have an opportunity like this!! So if you are sitting on the fence, give me a call, I will put you in touch with a lender and let’s make your dream of home ownership a reality!