A Mid-Year 2019 Home Purchase is 5%+ More Affordable than Last Year in Vancouver WA!
As we move into the second half of 2019, it is important to report that at least Two Changes have taken place that affect the Affordability* of a home purchase in Vancouver and Clark County Washington. The perhaps biggest change is the greatly lower home loan (mortgage) interest rates that we have this year. The graphic below shows the current interest rate for the 30 year home loan is now well below 4.0%!!!
Home Financing Rates are Way Down
For Mid-Year 2019
Last year at this time the interest rate was over 4.5% which is significantly higher than today's level, and this now-lower level has made a substantial positive impact on Affordability by lowering financing costs.
The second important factor helping with Affordability that we'll discuss is the Price of the Home. From my previous posts you know that the increase in the Average Home Sales-Price has slowed such that the increase for 2019 is about $11,000 over 2018; while the increase in 2018 over 2017 was about $33,000!
The combination of these two elements can be input into a Mortgage Calculator to see if a home in Vancouver is now more affordable than at this time last year or, less affordable. In the screen-capture-image below, I used the Average Sales Price for June in 2018 and 2019; and the Average Interest Rate as provided by Freddie Mac for June of each year, with a 3.5% Down-payment. In the columns "2018" and "2019" you can see calculations:
Home Loan Impacts with Lower Rates Mid-Year 2019
The monthly PIT (Principle, Interest and Taxes) payment in 2019 is $104.06 Lower than the payment a year ago - which an improvement of about 5.9%
. [note: there will also be an incremental payment amount for PMI - mortgage insurance, that hasn't been calculated in for the total monthly payments - just trying to keep this post a bit easier to understand]
Another way to "translate" that improvement is to look at how much higher can the purchase price be this year to keep the monthly payment the same. That question is answered in the "More Home" column, which shows the same payment can be achieved when purchasing a home priced at $392,210 - $23,210 higher than today's Average sales price of $.
The final column labeled "Extra Pmt" takes the difference in monthly payment and adds it in as an Extra Payment for an Average priced 2019 home at the current interest rate. One effect of this is to reduce the payback period by just over 3 years. Another effect is to lower the total Interest Paid by not quite $29,000 - Nice!
To sum this up, We've Done the Math and a home in Vancouver WA is more affordable to purchase this year than it was last year!
- Our Team, especially John Slocum, loves to help our customers Sell or Buy their home or property in Washington State, including the Vancouver and Clark County.
PPS - Home Shopping or, looking to right-size to another Home or Condo? We wouldn't have a real estate market if there weren't home buyers, and we love to help Home Buyers! As a part of our service we make it ease to Search all the available Real Estate for sale in Vancouver Washington or, separately Search all the available Condos for sale in Vancouver WA. We've put much custom work in to make it Easy for You to search by Neighborhood or by Category, with Homes and real estate listings from the entire RMLS. Sign-up is Not Required but recommended as you can Save your own custom search!
This report and custom charts (prepared by John Slocum Vancouver WA Listing Home Sales Broker, our resident statistician) are deemed reliable but not guaranteed.