Blog :: 10-2011

Monthly Payments for Homebuyers

A home buyer purchasing a typical American home at the prevailing average mortgage rate today would have a mortgage payment of $698 a month. This figure is not much different from what a home buyer would have faced 30 years ago. In 1981, home prices were much lower but mortgage rates were reaching 18 percent. Today, home prices have come down by about 33 percent on average from the bubble years, but prices still remain comfortably higher than those of the 1980s. However, thanks to record low mortgage rates, the monthly payment obligations have been greatly reduced.

Compare the chart below on the 30 year payment growth of the overall consumer price index, rent, food prices, gasoline prices, college tuition, and medical costs, versus the monthly mortgage payment. The rapid increases in college tuition bills may also imply too much demand, perhaps even a bubble in term of students not getting their money's worth. A recent spike in college student loans is due primarily to weak job market conditions, but may also be due to 'over investment' in education in relation to the cost.
At the other end, one sees the slowest growth in monthly mortgage payments for homebuyers. It is not that this cost element rose slowly and steadily over time; rather, it is the result of volatile swings in home prices and mortgage rates. Compared with the other items, the value proposition for homebuying is blaring!
Very tight underwriting standards, unfortunately, are keeping some good, hard-working Americans from taking advantage of the super affordable conditions.

Please note that homeownership costs include not only principal and interest payments on a mortgage, but also property tax, insurance, and home maintenance costs, which probably rose in line with the overall consumer price index.

Lawrence Yun, Chief Economist

Lawrence Yun is Chief Economist and Senior Vice President of Research at NAR. He directs research activity for the association and regularly provides commentary on real estate market trends for its 1 million REALTOR® members.

Fall Festival Weekend - Franklin County, Mass

The weather this weekend looks spectacular.  I will be joining my sister and attending the Ashfield Fall Festival.  This festival has an impressive selection of crafts created by local artists.  The food is fabulous and I must indulge in some fried dough with maple cream. YUM!   I don't think I will make this event, but I wanted you to know about Greenfield's first annual Blues & BBQ Festival.  It looks like a lot of fun.  If you would like to see what else is happening this weekend, take a look at the list on the Franklin County Calendar of Events website -

Here is more information about my two favorites for the weekend:

Ashfield Fall Festival

The 2011 Ashfield Fall Festival (Ashfield, Massachusetts) will take place up and down Ashfield's Main Street on October 8-9, from 10 a.m. to 5 p.m. on both days - rain or shine. The annual festival offers craft and art exhibits by more than 50 exhibitors, locally-grown and prepared foods, live music and dance, face-painting and other children's activities, and book and tag sales. Admission is free. 

First Annual Blues & BBQ Festival

The Greenfield Recreation Department and the Franklin County Rotary Club are hosting the first annual Riverside Blues & BBQ Festival on October 7th & 8th, 2011. The event was originally to be held at the Green River Swimming & Recreation area, but because of the flooding from Hurricane Irene, this year the event will be held at Beacon Field. This event will be officially sanctioned by the Kansas City Barbeque Society with anticipated professional BBQ teams competing from all over the country! KCBS is the world's largest organization of barbeque and grilling enthusiasts. Competitors will arrive on Friday, October 7th, and the Festival itself will be held on Saturday, October 8th from 10:00 am - 5:00 pm. KCBS will provide all rules and procedures for judging the BBQ competition. The festival will also feature food vendors, product vendors, crafters, beer sampling, Blues music, kids activities, and more.