New Trend May Pose a Problem for Middle Class Homebuyers

December 7, 2017
Legal tender
Photo: Pexels

Homebuyers on the least and most expensive ends of the housing market are paying cash, with one-third of purchases without a mortgage.

All-cash home sales are still above normal levels, according to The Wall Street Journal, and Attom Data's research shows 28.8 percent of homes purchased in 2017 were made without debt. Homes priced under $100,000 are bought with cash 63.9 percent of the time, and 49 percent of the time for homes priced at $2 million or more, per Business Insider

As Freddie Mac shows, mortgage rates are historically low, below 4 percent, but the interest can still accumulate extra costs. For a 30-year mortgage of $250,000 at a 4 percent rate, the buyer will end up paying $179,674 in interest. Taking out a mortgage may become even more of a burden if the GOP tax plan goes through without change. The plan would cap mortgage deductions at $500,000 and eliminate deductions on second homes.

Read more

Comments

Related Categories

PB-Trends
expand_less