If you Had Bought a Home Back then...?
Are you trying to make up your mind whether to "move up" to a bigger home or purchase your first house?
...but it's too darned expensive?
What's the price?
$100,000? $200,000? $500K?
If you had bought that $100,000 house or condo ten years ago, national averages say it would have cost you around $56,000. Locally, some markets have experienced even more price growth.
In 1994, today's $500,000 house would have cost about $280,000.
That's because the national median sales price ten years ago was 56% of today's price.
Once you buy a house, your payment remains stable. If you get a fixed rate loan the payment will remain exactly the same throughout your mortgage. Rates are averaging in the mid-5% range right now (October 2004).
Maybe those examples are too old, too long ago. Five years ago, a $100,000 house would have cost $70,000. A $400,000 home would have cost $280,000.
It doesn't make sense to rent. Rent keeps going up. House payments don't.
Plus, houses appreciate.
If you were paying off your thirty-year mortgage today, on schedule, the median average home price when you bought your home was only $32,000.
No one can predict the future, but since 1968, houses averaged an appreciation rate of 6.34% a year.
That doesn't sound like much?
If you buy a $250,000 house today, no one can tell you what it will be worth a year from now or five years from now. Based on 6.34% annual appreciation, a home kept in good condition in a solid location could be worth $1.5 million 30 years from now.
That's not a promise, though.
© October 2004 by RealEstate ABC
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