by Amy Lillard
(6/11/2012) Record-setting has been pretty normal in the topsy-turvy housing market over the past few years. But while many records set since 2008 have documented the unprecedented fall of home values and economic markers, the most recent records being set are combining to benefit the consumer and make homes the most affordable in decades.
Home prices continue to decline at record levels, according to the S&P/Case-Shiller home price index of 20 major markets, released last week. Average home prices were down 2.6% from 12 months earlier - the lowest they've hit since 2002.
Among the 20 major markets surveyed, 5 markets (Atlanta, Chicago, Las Vegas, New York, and Portland) each posted record lows as well. Atlanta was hit hardest, with home prices down 17.7% from the year before. On the other side, Phoenix recorded the largest gain in prices, up 6.1% from last year. Additional cities posting increased prices were Dallas, Denver, and Miami.
The decline in prices represents a major boon for consumers. Experts say the low prices, combined with record-low mortgage rates, make this one of the best times to buy in home in years. That fact could help boost the housing market.
Interest rates for 30-year fixed-rate mortgages are setting records each week as they decrease to all time lows. Last week's survey by Freddie Mac notes this mortgage has a 3.78% interest rate, down from 4.6% last year. The 15-year fixed mortgage rate was 3.04%, down from 3.78% last year.
Translated, the record low 30-year fixed-rate mortgage could save borrowers nearly $50 dollars a month for every $100,000 borrowed. When compared to the peak of the housing bubble in 2006, when average interest rates for 6.75% for a 30-year loan, borrowers are paying nearly half the amount per month.
According to a recent report by the National Association of Home Builders and Wells Fargo, the combination of decreased home prices and staggeringly low interest rates has made buying a home has reached its most affordable level in more than two decades.
For additional reading:
Trulia reports low home prices: http://www.usnews.com/news/blogs/home-front/2012/06/05/trulia-home-prices-falter-while-rents-soar
Home buying at most affordable level in decades:
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