Home buyer trends see mortgage rates decrease as property sizes increase

Things have changed somewhat in real estate over the past 35 years, according to data compiled by the National Association of Realtors for its Profile of Home Buyers and Sellers. The NAR has been generating this Profile since 1981, and they’ve observed these changes at first hand.

For instance, when people looked for a house in 1981, they obviously did so without the aid of the Internet, and the average monthly mortgage interest rate was 15.12 percent. That early-80s period of super-high interest rates was a response by the Federal government to rampant inflation in the 1970s. It was a relatively brief period during which rates were in double digits. Still, the historic trend for mortgage interest rates was for the benchmark 30-year fixed mortgage to be in the six-to-eight percent range – still a lot higher than today’s sub-four percent rates.

Other things have changed as well, in real dollar terms: In 1981, the typical buyer purchased a 1,700-square-foot home costing $70,000 ($201,376 in inflation-adjusted dollars). In last year's survey, purchased homes were typically 2,000 square feet and cost $220,000. Sales to first-time buyers peaked in 2010 and 2009 at 50 percent and 47 percent, respectively.

Also this year, first-time buyers have been hampered by high prices and a lack of available inventory. Yet, surveys show that today’s young people are eager to become homeowners.

If you’re in the market for a new home, Travis Credit Union can help. From our free home-buyer seminars to knowledgeable mortgage loan consultants who help you along the way, we’ll help you become a homeowner! To apply or for more information, visit our Real Estate Loans at www.traviscu.org.

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