Housing 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 house is not as important as the cost of a Broomfield home. Let’s break it down.
There are several factors that influence the cost of a Broomfield home. 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 home.
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 home.
Assume you purchased a home last year and took out a $250,000 mortgage. As mentioned above, home values have increased by 5.5% over the last year. To buy that same home 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 home values have appreciated, the cost of a Broomfield home can actually be less than in previous years. It’s a great time to buy a home because mortgage rates are at historic lows.
How Can I Help You With Your Broomfield Real Estate Needs?
I am consistently among the Top Real estate agents in Broomfield and I strive to exceed client expectations.
You May Be Wondering… What is My Home Worth?
Do you wonder what your home is worth in the current market? Do you desire a specific Property Valuation Report that I routinely prepare for my clients? Please contact me.
If you are considering buying or selling, I would appreciate the opportunity to earn your business (or that of a friend you think I could help).
Visit www.refrealty.net. Phone: 720.351.8488, or John@RefRealty.net
For questions regarding the Broomfield Real Estate Market in general contact:
John Grandt
Realtor® | Real Estate Negotiation Specialist
Global Luxury Property Specialist
John@RefRealty.net
720.351.8488
