I heard an interesting story on Nightly Business Report (PBS) last night that got my wheels turning a bit.
According to one of their sources, the drop in gas prices puts approximately $100 into the pocket of the average first time home buyer per month. With historically low interest rates, this can equate to a sizable amount of extra buying power. At 3.8% that’s close to $20K additional buying power (with 20% down).
In addition, something the story didn’t touch on with gas prices is the calculations that many buyers go through when trying to figure how ‘far out’ they are willing to live. When my husband and I bought our first home together, we chose a location that was farther out from town due to affordability of the location. We calculated what our yearly expenditure would be in additional gas and the output of gas money was well worth the savings on our home. When gas is three times as expensive as it is now, these calculations for other buyers might not make as much sense.
Just some interesting food for thought…