30-Year Rates Hit Record Lows

By November 3, 2011 Buying Right No Comments
Rates-Hit-New-Low
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It’s almost unbelievable, but it’s true. As of November 2011, Mortgage rates are at all time lows across the board. When I read this article earlier this morning, I was aware of the fact that rates have been low for a while, but sometimes seeing it on paper (or a screen) can have an additional impact.

In an online article by the Associated Press, posted on Yahoo Finance, the writer describes the historic low rates in the mortgage and home markets (30-year fixed @ 4.00%, 15-year fixed at 3.31%, and a 5/1 ARM @ 2.96%), and the Fed’s intentions of leaving the Fed Funds Rate at near zero. In addition, they are planning to shift more money into longer-term Treasurys, which pushes mortgage rates lower.

I did some quick math and ran a couple of scenarios on what that means for people buying Durango real estate, primarily based upon our median In-town home prices. It’s pretty remarkable:

In an apples to apples comparison, if you purchased a home in 2007 when 30 year fixed rates were hovering around 6 percent, and that home you bought for $375,000 with 20% down ($75,000), your total principal and interest payments over the entire term would be roughly $647,514. That same home (at hypothetically the same price today), with rates at 4 percent would cost roughly $515,608 over the full term. This is an astounding difference. Couple this with the fact that Durango real estate prices are down from the peak in 2007, and it seems like there is good value on a number of levels in buying these days.

About Shane Dawson

Shane’s been in the real estate industry since 1997. He launched his career working for one of the Country’s largest private landowners, managing and developing their privately held resort properties. In 2003 he moved to Durango, Colorado, where he has been selling real estate ever since. Prior to opening his own office in 2010, Shane spent five years as a Christie’s Great Estates agent selling the highest valued properties in Southwestern Colorado. His main areas of focus are in country homes, historic homes, farm & ranch sales, vacant land, luxury properties, bed & breakfast and hotel/motel operations. Shane holds the Accredited Land Consultant (ALC) and the Certified Residential Specialist (CRS) designations. He can be reached at (970) 769-2949. Click here for more information about Shane Dawson.

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