If you are going to look at home buying power now, the disparities with that two years ago are in some way quite astounding. Not only have home prices come down substantially, but the record-low interest rates make buying real estate very reasonably priced for those that can qualify for mortgage loans.

While the market really started slipping in the summer of 2007, home prices in Utah didn’t really start declining until 2008.

If you wereshopping for Salt Lake City Real Estate in July of 2008, the median list price of those homes was $309,000. A common rate for 30 year fixed mortgages of primary residences during that time was around 6.65%. {For a buyer purchasing the median home with a $44,000 {down payment}, this would leave them with a principal and interest payment of $1,701~For a home buyer buying the median home with a $44,000 down payment, this would leave them with a principal and interest payment of $1,701}. That time was certainly a good time to buy

Evaluate that with market conditions now:

The present median list price of Salt Lake City Utah Homes for Sale is $214,000. And, mortgage interest rates can be obtained at 4. A buyer would have paid just $836 a month if a s/he placed the same $44,000 down payment on the median house, at the going interest rate under these conditions.

That’s less than half as much as the monthly payment under the 2008 scenario.

If a home buyer pay his mortgage off at terms over 30 years, then he would paid a total of $347,434.49 in interest. They would have paid just $131,067.21 in the second scenario. And that means savings of more than $216,000 in interest over the life of the loan.

Because interest rates are so low now, and because home prices are lower, the buyer might actually want to consider a 15 year fixed mortgage. The home buyer would have a monthly payment of $1,215.30 with a 15 year fixed mortgage at the current median price, and the same $44,000 down payment. Yet more low priced compared to the 30 year fixed payment of 2008, but paid off twice as fast. With a 15 year fixed mortgage today, the buyer would save nearly $300,000 in interest compared with if they would have bought in 2008.

Now this scenario has flaws, and people rarely actually bought homes priced at the median price, but compared with two years ago, Salt Lake homes are very cost-effective.

 

Tagged with:

Filed under: Home Inspection Company

Like this post? Subscribe to my RSS feed and get loads more!