Why It is Hard for Buyers to Purchase a Home Today?

Why It is Hard for Buyers to Purchase a Home Today?

Example of a $1,200,000 home purchase:
Currently:       4 Years Ago
Sales Price         $1,200,000    $1,200,000
Downpayment $240,000        $240,000
Interest Rate     6.75%               2.75%
Payment            $6,198              $3,919
Taxes                  $1200              $1,200
Insurance          $200                $200

Total monthly: $7,598             $5,319
Yes, larger down payments will reduce the monthly cost, however it’s still a lot of money to pay for a home. How does a buyer get $240,000 for the down payment? Sale of another home, inheritance, gift from family, savings, retirement accounts or some combination of all. It certainly is not easy today. And look at the difference in payments between 6.75% and 2.75%.

As a buyer, it’s important to be pre-approved before starting your home search. If you’re a seller, you shouldn’t accept an offer from a buyer that doesn’t have a current pre-approval letter.