While mortgage rates are considerably higher than in mid-2021, real estate prices are well off their highs. So with real estate on sale, how much could you afford now compared to 2021? Let’s take a look at an example:
2021
$1,250,000 House price
3.25% 30-year fixed rate
$4,352 Monthly loan payment (assuming 20% down)
$1302 Monthly property taxes (assuming 1.25%)
$5654 Total monthly payment
2023
1,00,000 House price (down 20% from highs of 21)
6.25% 30-year fixed rate
$4925 Monthly loan payment (assuming 20% down)
$1041 Monthly property taxes (assuming 1.25%)
$5966 Total monthly payment
With rates almost double what they were and housing prices about 20% off their highs, we see that the difference in monthly payment is about $300. Not a huge difference. Also, with what we have seen over the last few months with inflation and with what experts predict for inflation reports in the coming months, the likelihood of being able to refinance in the 5s seems plausible. That makes now a great time to get into the market!
