Aug 222016
 

Interest rates are probably supporting the current price increases in our housing market, since they remain at or near historic lows, with 30 year rates at about 3.75% and 15 year rates at around 3%.    These rates have held in this range for almost 5 years now, bumping up about 1/4 point in 2014.

Historical Perspective on Average Interest Rates

At current rates, a $2,000 monthly principle and interest payment allows a buyer to borrow about $430,000 to $440,000, where a similar payment in 2003-2005 would have covered a $340,000 loan…and for much of the 1990s…$270,000 to $280,000.  Check out the following chart for perspective on this:

Historical Perspective on Average Interest Rates SMALLER

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