Housing Market Data Says Steady Growth
Updated housing market statistics were released May 16, 2016 by the San Antonio Board of Realtors. Melinda Magee, Broker Associate with Home Team of America, said her real estate board described the San Antonio market as steady with moderate year over year growth. According to the data release, the average sales price jumped up four percent from last year to $234,796, while the median home sales price rose five percent to $198,800. How does the San Antonio experience compare with the housing market inTexas as a whole? Texas is doing well too, with the median sale price rising 6.4 percent to $207,500. It has been said that for the long-term, housing is a good financial investment with a mix of safety and growth of your money. In contrast, saving with CD’s has been a fairly safe route, but for many years now, the interest rate on savings has been very low compared to investing the money in a house.
Housing Appreciation vs CD Savings
The Federal Reserve has been talking for some time about raising the federal funds rate, which theoretically will bump up CD rates for those that are keeping their money in the bank. Unfortunately, money kept in a 5 year CD has been earning rates hovering under one percent. Saving for years to have a large down payment to buy a house is almost counter-productive given that the value of the dollar erodes in a CD. There are many great low down payment loan programs today for individuals with reasonably good credit. If you have $15,000 in a CD and it earns 1 percent interest, that is $150. If you take that $15,000 and made a down payment on a $300,000 house last year and it appreciated an average of four percent like other houses in San Antonio, your appreciation would be about $12,000. Subtracting say, $2000 for housing maintenance reserves, that still leaves you with about $10,000 in value increase. Ten thousand dollars vs. $150. ” This value difference is why so many people who buy a home early in life come out far better ahead than those who postpone their entry into the housing market until they feel “more settled,” said Melinda Magee, Broker Associate, Home Team of America.
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