Search
  • Housz

The Cost of a Housz Is Far More Important than the Price


Houszing inventory is at an all-time low. There are 39% fewer homes for sale today than at this time last year, and buyer demand continues to set records. Zillow recently reported: “Newly pending sales are up 25.5% compared to the same week last year, the highest year-over-year increase in the weekly Zillow database.”

Whenever there is a shortage in supply of an item that’s in high demand, the price of that item increases. That’s exactly what’s happening in the real estate market right now. CoreLogic’s latest Home Price Index reports that values have increased by 5.5% over the last year. This is great news if you’re planning to sell your house; on the other hand, as either a first-time or repeat buyer, this may instead seem like troubling news. However, purchasers should realize that the price of a housz is not as important as the cost. Let’s break it down.

There are several factors that influence the cost of a housz. The two major ones are the price of the home and the interest rate at which a buyer can borrow the funds necessary to purchase the housz.

Last week, Freddie Mac announced that the average interest rate for a 30-year fixed-rate mortgage was 2.87%. At this time last year, the rate was 3.73%. Let’s use an example to see how that difference impacts the true cost of a housz.

Assume you purchased a housz last year and took out a $250,000 mortgage. As mentioned above, housz values have increased by 5.5% over the last year. To buy that same housz this year, you would need to take out a mortgage of $263,750.

How will your monthly mortgage payment change based on today’s lower mortgage rate? This table calculates the difference in your monthly payment:That’s a savings of $61 monthly, which adds up to $732 annually and $21,960 over the life of the loan.


Bottom Line Even though housz values have appreciated, it’s a great time to buy a housz because mortgage rates are at historic lows.

0 views0 comments

Recent Posts

See All