Monthly Housing Costs Up 84% In Three Years


Monthly Housing Costs Up 84% In Three Years
By Scott Rogers • June 26, 2023
Over the past three years... [1] The median sales price has increased by about 10% each year. [2] The average mortgage interest rate has doubled. [3] The City real estate tax rate has increased by 12%. Given these three changes, and how each plays into housing costs, it shouldn't be much of a surprise that monthly housing costs have increased significantly over the past three years. Three years ago, if a home buyer financed 80% of their purchase of a median priced home, they would be paying about $1,064 per month. Now, if a home buyer finances 80% of their purchase of a median priced home, they will be paying $1,959 per month. Beyond the "wow, that's a crazy increase" here are a few of my other thoughts and observations... [1] Perhaps this is a statement of the obvious... but this "increase in monthly housing cost" only affects those who are buying homes now. Anyone who already owns a home is not seeing this type of an increase in their housing costs. They might have a minor increase in their monthly housing costs due to rising assessed values, rising real estate tax rates and/or rising homeowners insurance rates, but those will amount to a relatively small increase in their monthly housing costs compared to what is described above. [2] Yes, this is a big increase... but it's partially because monthly housing costs were abnormally low for quite a few years as a result of super low mortgage interest rates. We have now exited a prolonged period of tremendously low mortgage interest rates. This kept housing costs very low for anyone buying a home (or refinancing their mortgage) during that unique time of low mortgage interest rates. Thus, the increase in monthly housing costs seems huge -- but it's only partially because of how high mortgage rates are now, but also very much about how low those mortgage rates were very recently. [3] Just a note on methodology. The housing cost numbers above are calculated using the median sales price of homes sold in Harrisonburg and Rockingham County per the HRAR MLS, combined with the average mortgage interest rate for the duration of the year, combined with the real estate tax rate for the City of Harrisonburg, and assumes a 20% downpayment. Bottom line -- it is quite a bit more expensive for someone to buy a home now compared to just a few years ago. Receive Updates by Email Recent Articles: Is There A Price You WOULD Pay For This House? There Are Plenty Of Types Of Houses That Exist That Just Are Not Available To Purchase Home Sales By Price Range In The City Of Harrisonburg Are You Compromising On Aspects Of Your Next Home That You Can Or Cannot Change Later? How Much Slower Are The Winter Months In Our Local Housing Market? Rockingham County and New Home Sales Drive Surge in Area Housing Market Find The Balance Between Optimistic And Realistic Home Pricing Room Size Is Difficult To Understand Solely From Real Estate Photos How Much Would You Value Not Having To Prepare Your Home For Showings? One Out Of Four Homes Is Taking Longer Than A Month To Sell
Have any questions? Contact Scott Rogers at 540-578-0102 or scott@funkhousergroup.com
Based on information from the Harrisonburg-Rockingham Association of REALTORS® or its MLS, for the period Jan 1, 2000 through Nov 24, 2024 (unless otherwise noted).
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