The first few months of 2013 will be a great time to buy the home of your dreams. At first glance, it appears that home prices in Texas have gone up. In fact, they have, by nearly $20,000 since 2008. At this point you might be asking yourself if we know what we’re talking about, as a $20,000 increase is nothing to laugh at, but don’t worry!
First off, in 2008, 30-year fixed-rate loans had around a 6.5 percent mortgage rate attached to them. With this rate, on the average priced Texas home, you’d be paying around $1,264 a month. Today you can get the same loan with nearly half the rate — about 3.6 percent — reducing that payment by about $270. You can use the money you save to help pay off your mortgage quicker, and for only $995 a month. Suddenly, your dream home, the very same one that should cost $20,000 more than a few years ago, now costs less per month.
Now, you might be asking yourself “Why is this the case”? Well, the power of low interest rates makes for all around lower costs for home buyers. Think of it this way: for each dollar that you put forward towards your monthly payment with today’s interest rates yields a massive $220 of purchasing power. On the other hand, with 2008’s rates, you only get around $158 dollars of purchasing power. Do the math; a monthly payment of $800 gets you nearly $50,000 more purchasing power than it did in 2008 due to today’s low interest rates.
Of course there are other factors when buying a home, such as taxes and insurance, so if you’re ready to find a piece of Stephenville real estate with your dream home, please contact us.