1981 vs. 2011: A Historical Housing Perspective 10/25/2012

You’ve likely heard a lot about the housing market recently. On the news there have been a lot of stories about low interest rates and high home affordability. When wading through the numbers, however, it can be easy to miss an amazing fact: The average home today is more affordable than the average home 30 years ago. How is this possible when today’s home is more than twice as much? Record-low interest rates.

In 1981, the average home was $82,000, the average 30-year fixed interest rate was 16.63%, and the average mortgage payment (principal and interest) was $1,147. Compare this with 2011’s numbers: average home at $242,300, average 30-year fixed interest rate at 4%, and average mortgage payment at $1,093. See the chart below.

19812011
Average Home Price$82,500$242,300
30-year Fixed Interest Rate16.63%4.00%
Mortgage Payment (P & I)$1,147$1,093

When you adjust for inflation, $1,147 in 1981 is the same as $2,838 today. Put simply, you can buy 20 percent more house for a more than 60 percent discount. Couple high affordability with the fact that interest rates are at all-time lows, allowing people to enter the market with less money than ever before and produce cash flow at a higher rate, and you have an incredibly performing asset!

As a Certified Investor Agent Specialist, I have spent a lot of time training myself in the best possible ways to help real estate investors build wealth. I do this by being an expert in my market and have developed a system that allows me to identify the best properties with the potential for the highest possible cash flow. Whether you are a first time investor or a seasoned veteran, I can be one of your most valuable resources.

Contact me today, and unlock a world of real estate wealth!


Powered by footer

©2017 Charfen Institute. | All Rights Reserved | Privacy Policy

Agent makes no warranty or representation about the content contained herein. It is strongly recommended that you seek appropriate professional counsel regarding your rights as a homeowner.