Posted on Friday, 14th May 2010 by Anna Kulbinski

Buying a home in Phoenix today is like going back in time 8 years, only better.

A look at the monthly average sales prices tells us that the lowest monthly average in 2002 was $154,392. And while we don’t yet have the averages for May of this year, the most recent figures available show a low average for 2010 of only $136,000.

Thus, you can buy a home in Phoenix today for nearly 12% less than you would have paid in 2002, before the prices began their meteoric rise to the peak average of $340,683 in August of 2007.

Average Home Prices in Phoenix, AZ

But it gets even better than that. Interest rates have also fallen by an average of 2%. And when it comes to interest rates, 2% is a huge number.

Assuming 100% financing for the sake of comparison, here’s what that means in terms of money going out of your pocket:

Had you purchased a home in 2002 at the average price of $154,392 you would have paid approximately 7% interest, bringing your payment to $1,027 per month.

Today, you can buy a comparable home for $136,000 – about 12% less. And as of this week’s rates, you’ll pay only 5% interest, for a payment of only $730 per month. So your monthly payment will be 28.9% less!

Predictions about the future abound, but most financial experts agree that interest rates will rise, and it could happen quickly. Some also say that prices may continue to tumble. But as you can see, the interest rate will have a greater impact on your financial future than saving a few thousand on the purchase price.

Even if that home priced at $136,000 dropped another 10% to $122,400, but the interest rate returned to 7%, your mortgage payment would be $814 per month – $84 more than if you purchased today.

If you plan to stay in your home for several years, and can say “yes” to these questions, now is a fantastic time to buy a home in Phoenix.

  • Do I love this house?
  • Can I comfortably afford the monthly payment?

What about other reasons for buying a house? I came up with 21 Reasons to Buy a House in Arizona few months ago- and those reasons were good enough for me.

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Posted in Buyers, Market Report, Market Statistics, Phoenix Real Estate | Comments (0)

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