Affordability Factor in Austin

March 12, 2013 at 2:58 pm 1 comment

The affordability factor is the calculation of how much home you can afford taking in to consideration current interest rates, your loan qualification and the current market.  Affordability in the US and in Austin, TX has never been lower.  Here is an easy example: 

 

1992

2013

Interest rate

8.5%

3.75%

Loan amount

$150,000

$250,000

PI payment

$1,153

$1,157

So your payment on a $250k house today would be the same as your payment on a $150k house in 1992. 

Another way to look at affordability is the impact of increasing interest rates.  I think we all can agree that interest rates will go up (hint:  they have never been lower).  For every 1% increase in interest rate, you lose 10% of your buying power.  Here is an easy example:

Interest rate

4%

5%

Loan qualification

$400,000

$360,000

PI payment

$1,909

$1,932

This information is provided as a guide.  We recommend that you contact your mortgage specialist for a thorough personalized mortgage assessment. (Don’t you love disclaimers like this?)

 

© Julie Nelson and The Nelson Project at Keller Williams Realty, 2013-2015. Unauthorized use and/or duplication of this material without express and written permission from this blog’s author and/or owner is strictly prohibited. Excerpts and links may be used, provided that full and clear credit is given to Julie Nelson and The Nelson Project at Keller Williams Realty with appropriate and specific direction to the original content.  Julie Nelson is a licensed Realtor with Keller Williams Realty in Austin, TX.  This article and other blog postings should not be construed as legal or professional advice.  Contact your favorite Austin real estate professionals in person for actual advice.  Julie can be reached at www.thenelsonproject.com.  Searching for homes?  We think this is the coolest Austin home search tool available.

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Entry filed under: Austin, Smart Buyers, Smart Real Estate. Tags: .

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© Julie Nelson and The Nelson Project at Keller Williams Reatly, 2008-2010. Unauthorized use and/or duplication of this material without express and written permission from this blog’s author and/or owner is strictly prohibited. Excerpts and links may be used, provided that full and clear credit is given to Julie Nelson and The Nelson Project at Keller Williams Realty with appropriate and specific direction to the original content.

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