Here’s something interesting. I saw a chart which showed how much you could afford to spend on a home if you wanted to keep your mortgage payment, interest and principle principle, under $1,000 per month.
In 1985, the interest rate was hovering around 12.22%. At that rate, in order to keep your mortgage payment under $1,000 a month, you can afford a home for $95,550.
Now let’s jump forward to the year 2000. Interest rates in 2000 were approximately 8.29%. At that rate you can spend $132,500 on a home and still keep that mortgage payment under $1,000.
Now let’s jump forward to now. Our interest rate is slightly under 4%. To keep that mortgage payment under $1,000 today, you could purchase a home for $212,250.
What this tells me is that if buying your first home, or if you’re going to move up to a nicer home, now may be the best time to act.