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1989 vs 2011…Now really is the time to buy

June 15, 2011

The affordability of homes is lower today than it has been in years…and to top it off, mortgages hit a historic low in 2010 and continue to remain at relatively low levels.  Take a look at this chart to help put things in perspective:

 

The cost of a loaf of bread and a gallon of gas has more than tripled since 1989 and car prices have nearly doubled.  While the median price of a new home has increased by 70%, mortgage interest rates, which stood at 10% back in 1989, are now less than half of what they were back then.  The impact of today’s super low interest rates is that the monthly mortgage payment on a median priced home in the US has increased by only $4 since 1989.

 

Unless a buyer is paying cash, the monthly payment tends to be a far more relevant number than the home’s actual purchase price.  So for buyers waiting for home prices to hit the floor, pay attention…the possibility of a slight drop in the price of a home will have very little impact on your monthly payment, while even a slight rise in interest rates (a more likely scenario) will have a huge impact on your finances.

 

Timing the market is never possible and in today’s market, staying on the sidelines is more likely to result in a missed opportunity than a small savings.  Buy now so you can look back and say, “I’m glad I did” rather than “I wish I had.”

 

If you’re looking to buy or are ready to put your home on the market,  email, text, or give us a call. As a resident of nearby Grey Oaks, Pickett Property Group is your Western Shawnee expert.

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