Home values in King, Snohomish, and Pierce counties, as measured by the Case-Shiller Index, are down 30% from the peak in July 2007. This is hardly an all-time low; they’re at about the same level they were at in 2004, which was a time of then-record price highs.
Mortgage rates are at their lowest level since the Truman administration, and that’s having a profound effect on affordability.
Put record-low mortgage rates together with today’s home prices, and you’ve got monthly payments that are their lowest since the 1990s!
At the peak of the market, a niceSeattlehome might cost $500,000. With a 6.5% interest rate, a minimum-down buyer would have $3050 mortgage payment.
Today, that home might cost $400,000, and with interest rates under 4%, the monthly payment goes down to $1815 a month:
You could look at this from a point of view that today’s buyers are spending 40% less on their mortgages than just five years ago; you can also look at it that today’s buyers have a third more purchasing power than in the past:
Either way – the combination of record-low interest rates and bottom-of-the-market prices are making homes much more affordable than at any time in the last dozen years.
We are actively looking to help first-time homebuyers – and move-up homebuyers – take advantage of this market. If you know of someone thinking of buying, we can help them make sound and wise choices in today’s marketplace.
Move-up homebuyers who may be discouraged by the currently low values – take heart; you’ll more than make up for it on the buying end!