Historical View of U.S. Mortgage Interest Rates From A Sacramento REALTOR
You here it all the time…”Mortgage Rates are at an all-time low,” and, “Interest Rates can’t get any lower!” If you look at it from a historical perspective, the fact that interest rates on a 30 Year Fixed Rate Mortgage are in the low to mid 3%, is amazing!! Couple that with home values in our current real estate market, and you have a “powder keg” of affordability. Additionally, lenders are offering outstanding programs like the 5% Down Conventional 30 Yr Fixed Mortgage w/ no Mortgage Insurance, and the FHA 3.5% Down Payment 30 Yr Fixed Mortgage, w/ 3% Downpayment Assistance through CHDAP. So, the myth that buyers need a large downpayment is out the window.
Take a look at Sacramento’s Average Home Price Figures since 2006:
From July, 2006 to July, 2008, Sacramento’s Average Home Price dropped $180,000.
From August, 2008 to August 2010, Sacramento’s Average Home Price dropped $33,000
From September, 2010 to September, 2012, Sacramento’s Average Home Price INCREASED $10,000.
(We are down $205,000 from 7/06-9/12, in case you didn’t catch that)
Now take a look at U.S. Mortgage Rates from a historical perspective (Thank You California Association of REALTORS):
Yep, we are down 14.98%!!!!!
So, let’s put this all together…if interest rates are at 3.5%, and the average home price in Sacramento is $210,000, a 95% Conventional 30 Yr Mortgage, estimated PITI, is approximately $1,137.01. Pretty nice right? $400,000, given the same loan program, is approximately $2164.70. Not too shabby either! Now these are approximations, and although I used to be a darn good mortgage professional, these figures may fluctuate with the market. But, they are great representations of where we’ve come from, and where we are now.