Home Affordadability the best it has been in years!

Sarah and Debbie Reynolds, "debrey"
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Contributions:37

I was new to Real Estate in 1988 when interest rates were in the teens. Today rates are in the high 3% and low 4% price range. That coupled with the price declines we have seen in recent years even though in our area the market is recovering make this one of the best times in history to buy a home.

Reynolds Team would be happy to help.

Please post if you have any questions about the home buying process, we would be happy to answer them.

Thanks ~ Debbie

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February 17 - US

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Replies (2)

Dan, "the_country_hick"
Contributions:4695

Debbie, what happens to house affordability at todays prices when interest rates go to a historically reasonable level of 8%? If affordability goes away at that time it makes sense that house prices would be forced to drop a lot.

Here is why.
A 30 year $106,000 mortgage costs $493.91 a month at 3.8%.
A 30 year $100,000 mortgage costs $491.94 a month at 4.25%.
A 30 year $82,000 mortgage costs $491.63 a month at 6.00%
A 30 year $67,000 mortgage costs $491.62 a month at 8.00%
A 30 year $56,000 mortgage costs $491.44 a month at 10.0%

If someone buys now and sells into a 8% or higher interest rate environment without massive increases in wages in a few years was the house truly affordable in 2012?

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February 17

Caveat Emptor
Contributions:500

If someone buys now and sells ... in a few years

then they were probably under the mistaken belief that this can sometimes be a good idea, when in-fact it is NEVER a good idea. If they fell into such a trap, its their fault.