Personal Finance, Purchase Campaign, Views You Can Use

Home Buyers Win 6.6 Percent Increase In Purchasing Power

October 16, 2012 by · Leave a Comment 

Mortgage rates in Northwest Indiana and nationwide continue to troll near all-time lows, boosting the purchasing power of home buyers statewide.

According to Freddie Mac’s most recent Primary Mortgage Market survey, the average 30-year fixed rate mortgage is now 3.39 percent nationwide, just three ticks off an all-time low.

At the start of last quarter, 30-year fixed rate mortgage rates averaged 3.62 percent. One year ago, they averaged 4.12%.

Click here to see today’s mortgage rates.

Purchasing Power 2010-2012

Click here to see today’s mortgage rates.

When mortgage rates are falling, they present Valparaiso Indiana home buyers with interesting options. Because of lower rates, buyers can choose to tighten their household budgets, buying an ideal home but paying less to own it each month.

Or, for buyers who shop for homes by “monthly payment”, falling mortgage rates put more homes with affordability’s reach.

As a real-life example, for a buyer whose monthly principal + interest mortgage payment is limited to $1,000 per month, and whom opts for a 30-year fixed rate mortgage, as compared to January of this year, the maximum property purchase price has climbed 6.6%, or $14,000 in list price.

Click here to see today’s mortgage rates.

Consider this comparison:

  • January 2012: A payment of $1,000 afforded a maximum loan size of $211,756
  • October 2012: A payment of $1,000 affords a maximum loan size of $225,771

The 6.6 percent increase in affordability outpaces this year’s rise in home prices and is one reason why the U.S. housing market is improving. Slowly and steadily, the U.S. economy is improving and “good deals” in housing are becoming harder to find.

In addition, because homeownership is now less expensive than renting in many U.S. cities, home demand among buyers continues to rise.

Click here to see today’s mortgage rates.

For today’s home buyer, market conditions appear ripe. Mortgage rates are near all-time lows, low-downpayment mortgage program remain plentiful, and home values have been rising since late-2011.

Within 6 months, rates may be up and homes prices, too. Purchasing power would decline, decreasing home affordability nationwide.

The best “deals” in housing, therefore, may be the ones you find today.

Click here to see today’s mortgage rates.

Related Posts Plugin for WordPress, Blogger...
Be Sociable, Share!

WelcomeHomeNWI

WelcomeHomeNWI.com was created to demystify the national real estate headlines and to provide unbiased real estate trends and statistics relevant to Northwest Indiana. Our mission is facilitated through a collaboration of professionals who are dedicated to the Northwest Indiana real estate industry. Welcome Home NW Indiana! Welcome Home! WelcomeHomeNWI.com is Your Home for Real Estate and Mortgage News for the Best Communities in Northwest Indiana.

More Posts - Website

  • FreeFicoScore.com

Speak Your Mind

WelcomeHomeNWI.com