We see that the ideal time to buy a home was between March 2009 and late 2012. Because of the current low interest rates, the typical house is no more expensive to own than it was 15 years ago in 2005. It is a lot cheaper than in mid 2006.
Focusing on the more recent years:
Although home prices have increased, monthly payments have gone down over the last 18 months.
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This is an important and compelling message that applies statewide - the bottom line being that even though average prices (in the Valley) are back to where they were at the market peak in April of 2006, the mortgage payment is 30% less! That's because interest rates are over 3% less. Put another way, today's buyer has 30% more buying power for the same cash outlay. This also increases the seller's pool of qualified buyers!
A major 'talking point' in the Peak Training Series is on today's interest rates - 3 points: 1. They're 'artificially' low (Fed printing money); 2. unsustainable; and 3. the money point - 'for every 1% interest rates go up buyers lose 10% buying power.'
Tina Tamboer's charts above skillfully demonstrate this phenomenon in a most timely way. Such a graphic is a remarkable message to both buyers AND sellers...
Message to buyers: You can't save money fast enough to compensate for what you will lose as interest rates inevitably climb.
Message to sellers: If you need financing for your next purchase you'll win on both sides by making your move sooner than later i.e. you'll have a larger pool of qualified buyers for your home today AND you'll have more buying power for that next purchase.
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