Home prices are increasing. Hearing that prices are going up, it's normal to think a home will cost more. But the way the housing market is today, low mortgage rates are actually making homes more affordable.
How is that possible?
Mortgage rates are at all time lows right now, so it's less expensive to borrow money. It took almost 20% of a monthly income to make the mortgage payment on the average-priced home as recently as July. That's 5% below the 25% average from 1995-2003. It takes a $1,071 monthly payment to purchase the average-priced home, which is down 6% from the same time last year, despite an increase in value by more than $12,000. Houses cost more but you pay less in interest, meaning your payment is lower.
Buying power is now up 10% year-over-year, meaning a home buyer can afford nearly $32,000 more house than they could at the same time last year, while keeping their monthly payment the same.
This is great news if you were unable to buy last year, or this spring due to the pandemic. You can now afford 10% more home than you could a year ago while keeping your monthly mortgage payment unchanged.
If you're thinking of making a move, now is a great time to take advantage of such low mortgage rates. Whether you're thinking of buying your first home or upgrading with a significantly lower mortgage rate than you may have on your current house, reach out to Veta The Realtor, your local real estate professional, today to determine your next steps in the process.
Veta The Realtor