How Today's Mortgage Rates Impact Home Affordability

Comparing July's conforming mortgage rates to today's average rates, there's a 1.5 percent difference in favor of homeowners.
Rate drops like that make big differences in a household budget. Look at these before-and-after payments, based on rates from the chart:
$150,000 mortgage ($144 savings/month)
July 2008: $958 monthly
February 2009: $814 monthly
$250,000 mortgage ($240 savings/month)
July 2008: $1,597 monthly
February 2009: $1,357 monthly
$350,000 mortgage ($335 savings/month)
July 2008: $2,235 monthly
February 2009: $1,900 monthly
Of course, the other side of the story is that while mortgage rates fell in late-2008, the mandatory lender fees that accompanied them rose. That lessened some of the benefits of getting lower rates, but certainly not all of them.
According to recent housing data, buyers are back writing contracts and listed homes are selling quickly. Considering how mortgage rates have led monthly payments lower, maybe it shouldn't be much of a surprise.
There has never been a better time to buy. Rates are the lowest in 50 years, prices are lower than they have been in years, and there is not much competition for desirable homes. The only problem is for people who need to sell their home first. Maybe this is a good time to lose some money on the sale of your home and make even more of the purchase of your next home?

(Image courtesy: The Wall Street Journal) www.piedmont-mortgage.com