Last year around this time I wrote a post detailing the monthly mortgage
payments vs. average rent payments in certain neighborhoods in
Sacramento, and I thought I would start 2012 with a similar post, updated with today's
interest rates,
average Sacramento home prices, and
average rents.
Today
was the first business day of 2012, and my phone rang off the hook.
Who was calling me? Prospective home buyers who finally have decided
that now is the time to
buy a home in
Sacramento. It seems that the overall sentiment among them is that it has become more affordable to
buy a home in
Sacramento than
rent
a home. In many areas and under many circumstances, I believe this to
be true. Prices are slightly down from last year, while
rents seem to have increased. If you don't believe me -- just compare this data to a
similar post from around this time last year.
When you take into consideration the
average home price and probable
monthly mortgage payment in particular
Sacramento neighborhoods vs. the average rent, often times the
mortgage payment is less. Let's take a look at a few different areas...just for the sake of citing my information sources, for
average home price (used to calculate mortgage payment scenarios) I am using most recent November 2011
Trendgraphix data (December's data is not available yet, and I don't expect a huge variance) which is taken directly from
MLS, and for average rent I am using the most recent
Q4 2011 Homepointe Quarterly Residential Rental Survey. For my
mortgage payment calculations,
I am basing it on a 4.25% interest rate (which is actually slightly
above today's average market interest rates), and including the full
PITI - loan principle, interest, monthly property taxes, and monthly
homeowner's insurance (and mortgage insurance where applicable).
Natomas -
95833,
95834,
95835Average single family home sale price: $194,000
Average rent for a 3 bedroom home: $1,422
30-Year Fixed
VA Loan (Zero downpayment): $
1,22630-Year Fixed
FHA Loan (3.5% downpayment):
$1,36830-Year Fixed
Conventional Loan (10% downpayment):
$1,20830-Year Fixed
Conventional Loan (20% downpayment):
$1,022Elk Grove /
Laguna -
95757,
95758Average single family home sale price: $213,000
Average rent for a 3 bedroom home: $1,384
30-Year Fixed
VA Loan (Zero downpayment):
$1,34630-Year Fixed
FHA Loan (3.5% downpayment): $1,502
30-Year Fixed
Conventional Loan (10% downpayment):
$1,32630-Year Fixed
Conventional Loan (20% downpayment):
$1,122Rosemont /
College Greens -
95826,
95827Average single family home sale price: $154,000
Average rent for a 3 bedroom home: $1,194
30-Year Fixed
VA Loan (Zero downpayment):
$97430-Year Fixed
FHA Loan (3.5% downpayment):
$1,08630-Year Fixed
Conventional Loan (10% downpayment):
$95930-Year Fixed
Conventional Loan (20% downpayment):
$811Arden -
95821,
95825,
95864Average single family home sale price: $250,000
Average rent for a 3 bedroom home: $1,466
30-Year Fixed
VA Loan (Zero downpayment): $1,580
30-Year Fixed
FHA Loan (3.5% downpayment): $1,763
30-Year Fixed
Conventional Loan (10% downpayment): $1,556
30-Year Fixed
Conventional Loan (20% downpayment):
$1,317Carmichael,
Fair Oaks -
95608,
95628Average single family home sale price: $236,000
Average rent for a 3 bedroom home: $1,370
30-Year Fixed
VA Loan (Zero downpayment): $1,492
30-Year Fixed
FHA Loan (3.5% downpayment): $1,664
30-Year Fixed
Conventional Loan (10% downpayment): $1,469
30-Year Fixed
Conventional Loan (20% downpayment):
$1,243Citrus Heights,
Orangevale -
95610,
95621,
95662Average single family home sale price: $164,000
Average rent for a 3 bedroom home: $1,300
30-Year Fixed
VA Loan (Zero downpayment):
$1,03630-Year Fixed
FHA Loan (3.5% downpayment):
$1,15730-Year Fixed
Conventional Loan (10% downpayment):
$1,02130-Year Fixed
Conventional Loan (20% downpayment):
$864South Land Park,
Pocket /
Greenhaven -
95822,
95831Average single family home sale price: $177,000
Average rent for a 3 bedroom home: $1,244
30-Year Fixed
VA Loan (Zero downpayment):
$1,11930-Year Fixed
FHA Loan (3.5% downpayment): $1,248
30-Year Fixed
Conventional Loan (10% downpayment):
$1,10230-Year Fixed
Conventional Loan (20% downpayment):
$933Obviously there are other tangible and intangible benefits to
home ownership
as well...for example, a tangible benefit is the fact you can
write-off your mortgage interest on your income taxes, and also deduct
some other related expenses each year. An intangible benefit might be
that as a homeowner, you have the freedom to paint the walls, decorate,
plant a garden, remodel, etc.
So clearly these numbers are just a baseline to give you an idea of housing
affordability in certain areas. You definitely need to consult a
loan officer to see what type of financing is the best fit for you, and ultimately just
how much you can afford - and there are several variables that will affect your interest rate and terms. You should also speak with a
CPA or
qualified tax professional regarding the mortgage interest and other
tax deductions to see how it will affect your particular situation. If you need a good referral to either one, feel free to
contact me and I can put you in touch.