Then and Now – An Amazing Yet True Comparison of Mortgage Payments
These figures are illustrations only. Prices are based on U.S median average sales prices, rates are reflective of a 30 year fixed rate loan for 1981 and early in 2013. Principal and Interest payments are based on an 80% loan to value, taxes are based on a factor of 1.5% of the sales price and insurance is based on a cost of 3$ per $1,000 of loan amount. Actual current rates, taxes, insurance, etc , can vary at any time.
Amazingly, you can purchase a median priced home today for a payment that can be lower than it was for the same home over 30 years ago. This is all the more amazing when we consider that with inflation, that payment is a much smaller percentage of average income than it was back then.
This Won’t Last Forever
Interest rates are historically low and once the economy improves or the Fed takes its proverbial foot off the gas pedal, mortgage rates will rise once again. As can be seen above, high rates back in the early 80’s made housing much less affordable than it is today. While we will not likely see a return to those lofty levels, even small increases in rates can make for big changes in what you can qualify for today.
Are you ready to take advantage of record affordability?
Reach out to me and I’ll be a happy to help you discover how much home a comfortable payment can secure for you today.