Housing prices are high, but would you believe that the actual cost of homes is lower today than ever before? Historically prices were lower, however, wages were also lower while mortgage rates were higher. Keeping that in mind, the actual cost to own is cheaper now.
Price vs. Cost
Price is the dollar amount at which a home is purchased. Cost is the actual expense of the property on a monthly basis. This includes how much of a household’s income must go into paying for their home. The website Zillow.com recently published research that examined the percentage of income needed to pay for a mortgage historically versus today. They looked at home prices, mortgage rates, and wages, and concluded that the cost to own is now 5.3% lower. This graph demonstrates their findings:
Rates would need to jump to 7% to exceed the percentage of income previously required to own a home.
It’s a great time to start reaching for your real estate goals! Whether you are considering upgrading from your current house or are a first-time buyer. Contact us TODAY to get started.