PRICE – vs – COST of a HOME…….

” If you can Image it, you can achieve it. If you can Dream it, you can Become it.” William Arthur Ward

                                                                                                                                                                 

 

There is a lot of research coming out showing that it makes great financial sense to purchase a home today.  Whether it be Rent vs Buy ratios, Income-to-Price ratios or Income -to-Mortgage payment ratios, purchasing a home now is a bargain compared to historic norms.  Now we want to look at the COST of a home today compared to peak prices.

According to the most recent S&P Shiller price index, residential real estate values have returned to 2003 prices.  Then when you factor in mortgage rates, the case for buying a home today  becomes even more compelling.

In 2003, 30 year mortgage rates were at 5.88%, Today they are at 4%.  How does that impact the actual COST of a home.  On a home purchased for $250,000, here is the monthly cost:

That means you save $285.30 a month, $3,423.60 a year and $102,708 over the life of a 30 year mortgage.  You buy the home for the same PRICE but the COST is over $100,000 less.

 

 

 

 

 

                                                                                                                                                                                              

 

 

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