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Buyers Win 6.6 Percent Increase In Purchasing Power

Purchasing Power 2010-2012

Mortgage rates in South FL 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%.

When mortgage rates are falling, they present Parkland & Coral Springs Florida 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 within 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.

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

For today’s home buyer, market conditions appear ripe. Mortgage rates are near all-time lows, low downpayment mortgage programs 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.

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Posted in: Coral Springs, Coral Springs FL, Coral Springs Homes, Coral Springs Real Estate, FL, Florida, Heron Bay, Home Values, Mortgage Rates, New Home Sales, Parkland, Parkland FL, Parkland Florida, Parkland Golf & Country Club, Parkland Golf and Country Club, Parkland Homes, Parkland Homes for Sale, Parkland Isles, Parkland Real Estate, Parkland Reserve, Personal Finance, South Florida Tagged: Freddie Mac, Mortgage Rates, Purchasing Power

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« What’s Ahead For Mortgage Rates This Week : October 15, 2012
Home Builder Confidence Moves To 6-Year High »

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Parkland FL REALTOR®Jon Klein, REALTOR®, P.A.,GRI

954-415-5595 Direct

954-449-9325 Office

954-827-0464 Fax

jon@jonklein.com

5691 Coral Ridge Drive
Coral Springs, FL 33076

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