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Homebuying 101: A Brief History of Rates & Home Prices

Throughout the next several weeks we’ll be posting articles and info on various aspects of the home buying process. Topics will cover everything from saving for a down payment, to refinancing, to purchasing investment properties, and more. We encourage you to connect with us on any questions you might have, and to share this information with friends and family.

 

Purchasing a home could be one of the biggest financial moves you’ll make, and deciding when the “best” time to make that move can play a big part in how much you’ll end up paying. With fewer properties for sale and rising home prices benefiting sellers, and rising rent rates and low mortgage rates encouraging buyers to jump in, both groups could recognize the benefits of the current housing market.

Currently, those home shopping (or looking to refi) are facing some of the lowest mortgage rates in history. Ultra-low mortgage rates weren’t always the norm, though. Curious about how the market has changed over the years? Let’s take a look…

Year 30-Year Fixed Mortgage Rate Inflation-Adjusted Median Sale Price for a Home Inflation-Adjusted Monthly Payment
1971 7.50% $135,696 $948.81
1976 8.87% $169,352 $1,346.83
1981 16.63% $165,228 $2,306.05
1986 10.19% $183,014 $1,631.83
1991 9.25% $192,124 $1,580.55
1996 7.81% $194,631 $1,402.44
2001 6.97% $215,760 $1,431.10
2005 5.87% $268,974 $1,590.22
2010 4.69% $221,800 $1,149.01
2016 3.75%* $295,600* $1,368.96*

If you look at 2016 vs 1976 you can see that, although the two payments are almost the same, the 2016 payment is based on a much more expensive house. Those buying in today’s market also have the advantage of today’s benefits and wages, so they are likely feeling the effects of the mortgage payments much more lightly than those from 1976’s market.

You can also see from the above data that, although you can’t do much to control the effects of inflation, you can take advantage of much lower-than-average mortgage rates to help keep those monthly payments low. The table shows that rates can, and will, change and that these are some of the lowest rates we’ve seen in decades. If you’re on the fence about whether or not it’s a good time for you to buy or refi, be assured that the low rates we’re seeing are well below average for the past several years.

 

Questions?

Steven Raymond, VP or Residential Lending at USAgencies Credit Union, has over 30 years of experience in the mortgage industry. Steven’s seen it all, as far as mortgages go. If you have questions—about refinancing, getting pre-approved, or anything else mortgage-related—talk to Steven!

Steven Raymond
Vice President of Residential Lending, NMLS#: 234025
Direct: (503) 275-0329
Toll-free: (800) 452-0915 x329
Email: sraymond@usacu.org

Ready to go?
Apply for a mortgage online now.

Equal Housing Lender Logo blog
USAgencies Credit Union
NMLS#: 441193

Sources:
mercurynews.com/real-estate-news/ci_30047385/since-1971-how-much-home-would-have-cos

*Data for Portland-metro area, Oregon.

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