When the economy was
exploding in the early 2000s, many of us began to dream about purchasing that
vacation home on the lake or securing a home in a more appropriate location for
our retirement years. However, with the booming economy came skyrocketing house
prices. Many of the homes we fell in love with quickly became out of reach
financially. Perhaps we should take a second look at these same homes today.
With prices dropping by over 30%
in some markets and with interest rates at historic lows, this may be the
perfect time to do what we and our families have always dreamt of doing –
buying that second home. Let’s look at the numbers.
Back in 2006 we may have seen the
‘perfect’ home but the $500,000 price tag was just out of reach. Today, we
could probably get that home for $400,000 (if not less). We also would be
financing it at the current mortgage rate instead of the rates available six
years ago. The table below shows the difference in impact on our family’s
finances:
