Whether you’re renting or on the hunt for owning, paying monthly for a roof over your head isn’t the easiest of tasks.
But as of late, with slower home price growth and lower mortgage rates, potential homebuyers are paying less on their monthly mortgage payment than a year ago and building equity, something you can’t necessarily do when you rent a home.
The U.S. median sales price this past June was $235,433 – up 3.3% year over year. While this can be concerning, mortgage payments have dropped 6.1%.
Why the decline?
The fall is mostly due to decreases in mortgage rates. The typical mortgage payment in June was roughly 32% lower than the all-time high of $1,287 set in June 2006.
According to CoreLogic’s reports, forecasters predict annual gains in home prices to average around 4.5% on a monthly basis through June 2020. They also predict that a rate on a 30-year fixed mortgage during that time will be about 0.7% lower than a year earlier.
Freddie Mac reported the average on a 30-year fixed-rate mortgage was 3.56% last week.
We’ll have to wait and see just how close the forecasts are to reality, but the reports are looking to favor the side of homebuyers.
Be sure to check out Alliance’s Blog for more real estate news and updates.