It’s all over the news this week that the Conventional 30 year fixed mortgage rate dropped to yet another “Historic Low”. With all the talk about historic low mortgage interest rates it’s difficult to visualize what that really means. So I thought I would put this into some sort of perspective.
Today is Friday, September 21st, 2012.
• The 30 Year Fixed Mortgage Interest Rate as of today is 3%.
• The Average Sale Price of a home in the Des Moines Multiple Listing Service for the past 30 days is $175,500.
• A buyer purchasing a home for that amount today using Conventional Financing with a 5% down payment would take out a mortgage of $166,725. ($175,500 x 95% = $166,725)
• The Principal & Interest payment on this amount would be $702.92 per month.
Now let’s compare these same numbers to January 1st, 2010.
• The 30 Year Fixed Mortgage Interest Rate on January 1, 2010 was 4.875%, just short of two full percent from today’s rate.
• We will use the same Sale Price of $175,500 with 5% down payment and a mortgage of $166,725.
• A buyer financing the exact same amount on January 1, 2010 would have had a Principal & Interest payment of $822.32 per month. That is a difference of $119.40 per month.
What this means is that as of today, that $119 gives you over $28,000 more buying power than you had in 2010! In other words, assuming your income and expenses were the same today that they were in 2010, the lower mortgage interest rate today would allow you to buy a home for just over $200,000 and your payment would still be LOWER than if you had purchased the same home in 2010 for $175,500.
Des Moines Real Estate Week In Review Ending September 21st, 2012
Total Residential Active Listings – 4,437
New Listings Taken During the Last 7 Days – 278
Current Accepted Offer Count (Pendings) 1,594
Accepted Offers (Pendings) During the Last 7 Days – 178
Closed Transactions During the Last 7 Days – 146
Average Sale Price of Solds – $176,077
Average Days On Market of Solds – 103
YTD Solds Ahead or Behind Last Year To Date – 1,106 Ahead
Les Sulgrove, Keller Williams Greater Des Moines
Data Source: Les Sulgrove, Keller Williams Greater Des Moines
10200 Hickman Ct., #100, Clive, IA 50325
Des Moines Area Association of REALTORS® MLS.
Des Moines Iowa Real Estate Statistics by Les Sulgrove is licensed under a Creative Commons Attribution- NoDerivs 3.0 United States License.