Friday, February 17, 2012

Mortgage Rates and Real Estate Statistics Metro Denver Colorado

Rate versus Price Reduction REAL ESTATE for Metro Denver Colorado Everyone wants to get the best deal when buying a home. However, for potential buyers who are waiting to see if home prices come down a little more, the wait could cost them. Let's look at an example to see why. Say a homebuyer wants to buy a home that costs $300,000. But the buyer wants a better deal on the home, so she delays a transaction until the home is reduced by $10,000. If, in the meantime however, rates were to rise .75% to 6.00% and the buyer financed 90% of the purchase price, the amount of total payments over a 30-year term would be over $35,000 more than paying the $300,000 purchase price and locking in the 5.25% interest rate. In other words, the buyer would save $10,000 only to end up paying $35,000 more. Now these prices and rates are just for the sake of example. But the point is that home prices are already very affordable...and rates are still low for now. So in the end, waiting for a home price to reduce may end up costing homebuyers much more than they expect if rates rise. One more thing that most buyers don’t realize is: For every $1,000 they save it only lowers their mortgage $4.00 a month. The figures below are for the Metro Denver Colorado area Prices of homes below $85,000 went UP 19% in the last 12 months, prices between $86,000 and $135,000 went up 10%, prices from $136,000 to $210,000 went up 6% and prices from $211,000 to $315,000 went up 1%. Homes above $315,000 went down in price in the last 12 months. What this trend is showing it that prices of homes are beginning to hold steady and rise. So, if someone is going to purchase a home, NOW is the time to buy before prices continue to rise. If you would like to brainstorm about Real Estate feel free to call or email Denise Wambsganss – Realtor at Your Castle Real Estate 303-880-8771 or email: