“I know I can sell my house for a high value right now, but I also have to buy another home at a high price, and I don’t know if it makes sense to do that.” This is a problem that many homeowners have come to us with in our current market. Interest rates are the lowest they’ve been in the last 50 years, so to help people who have found themselves in this dilemma, let’s look at how interest rates can impact your real estate decisions.
At 0:51 in the video above, you’ll find an infographic showing how interest rates have changed over the last 50 years and how that has impacted homebuyers’ monthly payments. For example, in the 1970s, the average rate was 8.86%. For a $300,000 home, that meant the buyer’s monthly payment would have been $2,384. Then in the 80s, the average rate rose to 12.7%, and the monthly payment on a house of the same price rose to $3,248.
Moving forward to more recent times, the average rate in the 2010s was 4.09%, with a monthly payment of $1,448. That leads us to today, where the average rate is 2.96% with a monthly payment of $1,258. Compared to the 70s and 80s, that’s more than a thousand-dollar difference.
So ultimately, the price at which you purchase a home doesn’t have as much impact on your lifestyle as the monthly payment does. If you’ve decided to buy a home, focus on how much you qualify for and what your payment will be. That’s the main factor when it comes to helping you decide to move forward or not.
If you have any questions about this topic or anything else to do with real estate, don’t hesitate to reach out to me. I’d love to speak with you.