Phoenix Real Estate Market Update July 2016

Phoenix Real Estate Market Update July 2016

 

This month- let’s talk about price versus cost of a home.

As a seller, you are most concerned with the short term price of your home.  When you sell, you get your money and go.

However, as a buyer, you must be concerned not just with the price, but also with the cost of buying a house.  Today’s historically low interest rates are great for home buyers.  But most economists agree that in the not too distant future, interest rates will go up.

Today, a $250,000 house at 3.5% interest will give you a principal and interest payment of over $1,100.  Let’s assume that the economists are correct, and next year’s interest rates rise by 1 point to 4.5 percent.  This would raise your monthly payment by $145.

Today’s $250,000 house will most likely increase in value.  Using 5% appreciation, your monthly payment would rise to over $1,300 a month.  This is a $208 a month increase, and an increase of over $2,500 a year.  If you keep the loan for the full 30 years, it is an increase of $75,000.

If you want to discuss buying or selling a home, feel free to contact me for more information.

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