A renter paying $900 per month could potentially buy a home in the price range of $120,000 to $135,000 (depending on borrower’s credit score and debts) and not increase their monthly payment (based on a $130,000 sales price, 3.875% 30 year fixed rate with an ARP of 6.177%).
Plus, Mortgage Interest Rates are still at historically low levels. For example, the cost for every $1,000 borrowed at a 3.75% 30 year fixed rate is only $4.63 per thousand.
Home values are beginning to recover, but current home values in the greater metro Atlanta area have only recovered back to 2002 levels!
So, let’s put this into perspective, a potential homebuyer can buy a home at 2002 prices and interest rates at 1956 levels! Wow, it really is an amazing time to buy a home!
It really is interesting that mortgage interest rates are at 1956 levels. That means that the last time interest rates were this low, Elvis Presley released his first hit, Heartbreak Hotel; a gallon of gas cost 20 cents; a gallon of milk cost 97 cents; a loaf of bread cost 18 cents; a postage stamp cost 3 cents; the average cost of a new car was $2,000; and the average home price was $2,500!
It’s even more mind blowing when you stop to realize that you can lock in the interest rate on one of the biggest purchases you’ll likely ever make for 30 years! We can’t lock in the price of a gallon of milk or a gallon of gas for a day, much less for 30 years!
Who do you know that is currently renting? Maybe you should ask them the $54,000 question.