Austin TX Real Estate - Hill Country Austin Lakeway Homes for Sale: December 2011

Interest Rates Effect How Much Home You Can Afford

Just how low are rates right now?  They are so low, you can buy more house today with the lowest payments ever in history!  I was talking with one of my buyers a couple of days ago. She's very concerned about mortgage payment. We've had the same discussion three times, and we go in circles. She's thinking about settling for a house today that is very cheap, and then getting a "better" house in 3-5 years.

interest rates increase houses for sale austin txEach time it's, "Rates are below 4% today. We don't know what rates will do in 3-5 years. What if you are only able to buy the same price point house at that time because rates increase so much, the payments are out of your reach?"  Each time, I get an "Ahhh, I understand..."

Here's a personal example that made my jaw hit the floor.  The very first house I bought at age 24 had a loan amount of $134k. Since I was self employed, my interest rate was 7%.  At today's rate of 3.75%, to keep the same payment that I received back then, I could have a loan amount of $192,500 today!

That's crazy!  I'm thinking, what would a 24 year old do with a $200k house?  The average prices in the area are under $200k. That means I would be able to afford a house above the "average".

I thought those numbers were astonishing!!  It boggles my mind to think how much the interest rate plays in what people can afford. With the same example above, at a 5% interest rate, I could get a loan amount of $166k and have the same payment.  $166k is a considerably different house in a very "different" neighborhood than $192,500 and definitely $134k.

1% here and there makes a huge difference! If you're thinking from the get-go that you'll just buy a "better" house later, think about how much that could cost you if you're able to actually afford that better house now.

**Are You Packed Yet?**

donna harris Realtor Austin TX blog

Donna Harris, REALTOR®
RE/MAX Austin Skyline
www.DonnaHomes.com

Donna@DonnaHomes.com
austin-texas-homes-for-sale.com

Austin TX Real Estate and the surrounding areas of Lakeway, Bee Cave, West Lake Hills, Cedar Park, Round Rock, Spicewood, Circle-C, Steiner Ranch, and everywhere in between... Hill Country Austin TX Real Estate and beyond. Whether you're buying or selling an Austin home, I'll be with you every step of the way. 

For real time Austin TX listings,click here.

** Multi-Million Dollar Producer Year after Year **


Copyright© 2011 By Donna Harris, All Rights Reserved. You may re-blog with links back to this post.

* Interest Rates Effect How Much Home You Can Afford * was first published on donnahomesblog.com.

 

Comment balloon 6 commentsDonna Harris • December 30 2011 07:03PM
Interest Rates Effect How Much Home You Can Afford
share
Just how low are rates right now? They are so low, you can buy more house today with the lowest payments ever in history! I was talking with one of my buyers a couple of days ago. She's very concerned about mortgage payment. We've had the same… more
Austin TX Makes National News on Fox Business
share
Austin TX real estate makes National news on Fox Business. They didn't just talk about Austin for 30 seconds and then move on. They actually talked about Austin for a good couple of minutes and gave some great information. Highlights: &… more
December’s Season of Celebrations & Sharing - Austin TX - Zilker…
share
Did you miss the official lighting of the Zilker Holiday Tree? Don't fret! It's lit every night at 6pm though December 31. This is a big Austin tradition and even though the trail of lights is gone, the tree still stands. And if you still… more
Canyon Creek - NW Austin TX - Homes for Sale
share
One of North West Austin's highly sought after communities, Canyon Creek, is selling like hotcakes during this Fall and Winter season. Last month, I wrote about Canyon Creek homes selling at an average of 100. 1% of asking price Here's some more… more
December’s Season of Celebrations & Sharing - Whole Foods -…
share
Are you planning on making any homemade goodies for the Holidays this year? Whole Foods is having a "Chocolate 101: Hands on Cooking Class" on December 21 from 6:30-9pm. This sounds so yummy!! They'll be making lots of chocolate treats… more
December’s Season of Celebrations & Sharing - Hill Country…
share
Have you not had time to get your pictures with Santa? Santa is still at the Hill Country Galleria on a daily basis through Christmas Eve at 6pm. Check out the schedule below. **graphic courtesy of the Hill Country Galleria's website.. more
Spillman Ranch - Falconhead - Bee Cave Austin TX- Market Report
share
The community of Spillman Ranch, more commonly known as Falconhead, has shown some fairly good sales this year. The community is almost completed with just a couple of inventory homes from one builder left. Look at the sales data from about… more
December’s Season of Celebrations & Sharing - Lake Travis High…
share
'Tis the Season for high school football playoffs… Lake Travis High School in Lake Travis ISD has made it to the State Championships! They have already accomplished a 4-peat and are currently in the "Drive for Five" Lake Travis will… more
ActiveRain Meetup in Austin
share
We had an ActiveRain Meetup in Austin today. It was/is a very drury, raining day, so I'm sure that kept many people away. We had 5 people there, and one on the phone in spirit as he wrong a contract for a client. We caught up on… more
December’s Season of Celebrations & Sharing - Armadillo Christmas…
share
The Armadillo Christmas Bazaar is now underway in its 36th year. It opened yesterday and runs through December 24th at the Palmer Events Center in the heart of Austin TX. What's the Armadillo Christmas Bazaar? It's an arts and craft show with local… more
ActiveRain Meetup - Austin TX - December 15 - Hat Creek Burger - TODAY
share
ActiveRain is doing another round of Meetups for everyone in the Austin area to get together and network. I expect more of a turn-out this time! I've only heard from about 3-4 people. Where are all the Austin people? I know it's a rainy day… more
Wordless Wednesday - Photo Shoot
share
Landon turned really grumpy at our photo shoot, so Alyssa and I started tickling him so he would at least smile, if not laugh… he ended up looking at us like we were crazy and we captured a great moment. **Are You Packed Yet? ** .. more
The Buyer that Got Away
share
I have been a REALTOR® for more than 11 years now. If I told you that I sold a house to every buyer I worked with, I would be lying. There are many reasons why a buyer doesn't end up buying with me, and the biggest reason is that some buyers just… more
Austin TX Ranks #8 for Best Business Communities by MarketWatch
share
Austin TX hits another top 10 list. This one is ranking #8 for Best Business Communities according to MarketWatch. Here is the criteria used: 1. Per-capital sales volume, based on revenue of S&P 500 companies in a metro area, divided by… more
Island on Lake Travis - Lago Vista TX - Short Sale - First Floor Unit…
share
Short Sale potential at The Island on Lake Travis condominiums in Lago Vista TX. Great unit, completely updated and what a fantastic VIEW! The Balcony is large with great entertainment possibilities. Overlooking the… more
NAR Reports only 60% of Buyers Use a Buyer's Agent
share
The 2011 NAR profile of Home Buyers and Sellers came out with some very interesting information, and I've been taking it all in. Something that caught my attention is that only 60% of buyers worked with their own Buyer's Agent. With all the NAR… more
Rain in Austin TX - Lake Travis Water Levels not Really Changed
share
We just had 3 consequetive days of rain. Good, right? Yes, very good, as we're in a horrible drought here in Austin TX. However, I'm very disappointed. Before the rain started, we were at 626. 36 feet in Lake Travis. Three days later, we're only at… more
Austin TX Spends Second Most on Electronics
share
Austin TX ranks second on the Top 10 Cities of How America Spends on Electronics. That's a lot of stereo equipment and computer stuff… but Austin is known for their technology sector. On average, Austin TX is spending $78. 50 a month on… more
December’s Season of Celebrations & Sharing - ActiveRain Meetup -…
share
ActiveRain is doing another round of Meetups for everyone in the Austin area to get together and network. I expect more of a turn-out this time! We will be celebrating the year and sharing new ideas for next year! We're going to try the new… more
December 2011 Market Reports Challenge
share
December 2011 Market Reports Challenge. Last Month for bonus points… If you haven't heard about the challenge, read about it here Please post ONLY your Market Reports on this post and not questions about the challenge. Since I… more