Home Buying Power In Today's Market

When you consider home buying power now compared with that in 2008, the differences are pretty astonishing. Not only have home prices come down considerably , but the record-low interest rates make buying real estate very affordable for those that can qualify for mortgage loans.

Home prices in Utah didn't really start dropping until 2008 when the market really started slipping in the summer of 2007.

If you wereshopping for Real Estate in Salt Lake City Utah in July of 2008, the median list price of those homes was $309,000. A common rate for 30 year fixed mortgages of primary residences during that time was around 6.65%. For a home buyer buying the median home with a $44,000 down payment, this would leave them with a principal and interest payment of $1,701. And that was a good time to buy

Examine that with market conditions now:

The present median list price of Homes for Sale Salt Lake City Utah is $214,000. And, mortgage interest rates can be obtained at 4. A buyer would have paid just $836 a month if a s/he placed the same $44,000 down payment on the median house, at the going interest rate under these conditions.

That is not even half as much as the monthly payment during the 2008 scenario.

If a home buyer pay his mortgage off at terms over 30 years, then he would paid a total of $347,434.49 in interest. They would have paid just $131,067.21 in the second scenario. That's savings of more than $216,000 in interest over the life of the loan.

Because interest rates are so low now, and because home prices are lower, the buyer might actually want to consider a 15 year fixed mortgage. The home buyer would have a monthly payment of $1,215.30 with a 15 year fixed mortgage at the current median price, and the same $44,000 down payment. Yet more low priced compared to the 30 year fixed payment of 2008, but paid off twice as fast. A home buyer would have saved as much as $300,000 in interest compared with a 15 year fixed mortgage today with if they would have bought in 2008.

Now this scenario has flaws, and people rarely actually bought homes priced at the median price, but in relationship to home prices two years ago, Salt Lake Utah Homes now are very cost-effective.