A 40 Year Look Back at the Typical Mortgage Payment
Every day we are faced with the uncertainty of mortgage interest rates and their potential effect on home sales. There is no real consensus on what next months activity will be or the month after that. The one opinion that seemingly will be absolute it that we will not likely see the historically low rates that we saw before April of this year.
We know that now is the best time to buy a home as today’s rates increase the purchasing power of the average home buyer. We also know that as rates increase, your purchasing power decreases as you will pay more in a mortgage payment for the same home. A look back at the historical costs of a typical mortgage payment was on the average $250,000 home illustrates this very clearly. The chart below shows what the payment and interest were for each of the past four decades.
It is true that we may never see rates as low as they are right now. So, if you were considering buying or investing in real estate, a look back will tell you that NOW is the time.