I had lunch with the sales staff of a local builder I represent yesterday. A couple of tasty pizzas combined with an interesting conversation led to this post.
Many of the potential buyers are walking in concerned about everything they are reading, hearing, and seeing in the national media. “It’s a bad time to buy”, seems to be the news of the day.
As we sat there and ate, we jumped onto Google and looked at the rents of an apartment complex within sight of the subdivision. The rent for a 1608 square foot apartment is $1639 a month. We compared that to a brand-new 1620 square-foot townhome. The townhome is priced at $195k. An FHA mortgage with a 3.5 percent down payment results in a mortgage payment of about $1626 including principle, interest, taxes, insurance, mortgage insurance, and HOA dues.
For the same money being paid for rent, one could own a townhome. These figures do not take the tax advantages or long-term appreciation in account.
Home and interest rates are both low. It will not stay that way. Home prices in North Texas are up 3.5 percent over last year and Collin County is up 5.4 percent. Interest rates will remain where they are as long as the government continues to purchase most of the mortgage loans. They cannot continue to do so forever.
I suspect we will look back at this period in 20 years as the golden opportunity of a lifetime.
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