In earlier posts, I mentioned the lack of supply plus soaring lumber prices combined with Covid creating our new normal in the real estate market. Well, there is more to the story. 

In 2006, there were 4 million homes for sale in the USA. Today, there are roughly 1 million homes on the market. Let that fact sink in for a bit. 

Moreover, interest rates in 2006 and 2007 were at 6-6.5%. That is more than double what they are today. 

To put this into perspective, if you are buying a $1M home today at current rates your monthly mortgage payment is approximately $3,350 a month. We can extrapolate up or down regarding value to account for value. In the 2006 rates, it would be closer to $5,000. That is nearly a $1,700 per month savings! 

It would equate to a $1,500,000 home purchase price in 2006, which is 50% more purchasing power. This is why homes are getting bid up over the asking price and moving so quickly. 

Remember, as consumers, we are classically conditioned to negotiate the purchase price of everything we buy. The truth is, at today’s rates and even those from 2006, or even 1980, if you finance your home purchase you are buying a payment. With that being said, there has literally never been a better time to buy if you need a mortgage to purchase your home.