According to a recent survey commissioned by Move Inc., 23% of adults plan to purchase a home in the next five years and 53.5% of them happen to be first-time homebuyers. If you have potential homebuyers who are sitting on the fence thinking about purchasing a house, here are some talking points you can share with them.
Lower property values are making homeownership more attractive than renting in many markets throughout the country. Paying for a mortgage is now less expensive than renting in many large metropolitan areas, including Miami, Las Vegas, Phoenix and Washington, D.C., as well as smaller cities like San Antonio and Fresno, California.
Buyers have the upper hand as sellers are cutting prices on nearly one quarter of U.S. homes listed for sale in June 2010 according to the real estate website Trulia.com. That’s up 9% from the previous month and represents a total price reduction of about $27 billion.
Lower mortgage rates are the result of the current recession. What does this mean for your clients? On a 30-year fixed-rate loan amount of $200,000 at 5%, the interest paid over the life of the loan is $186,512. That brings the total loan payments to $386,512. At 6%, the amount of interest paid rises to $231,676, a 24% increase. At 7%, it’s $279,018, a 49% increase.
Investment opportunities abound as mortgage rates and home prices have dropped dramatically since March 2008. This has created one of the best buyer affordability conditions with the percentage of median household income needed to pay the mortgage on a median priced home at a 30-year low.
