The Federal Reserve announced today that they will keep interest rates low until at least late 2014 in an effort to help jump-start the sluggish economy by making it less expensive to borrow money across all segments of the economy.What this means for homebuyers and current homeowners is that mortgage rates for a purchase loan or to refinance will remain remarkably low in the near-term, keeping affordability high. The 30-year fixed mortgage rate fell below 4 percent on Zillow Mortgage Marketplace in mid-October 2011 and has dropped as low as 3.67 percent in recent weeks.
Here's a quick comparison of mortgage rates and affordability using today's rates compared to 2008:
Today's rates: For a homebuyer shopping for a home today assuming 20 percent down and today's interest rate of 3.7 percent, they would be able to afford a $215,000 home with a monthly mortgage payment of about $1,000 per month (including principal and interest).
2008 rates: If a homebuyer shopped for a home in 2008 when mortgage rates averaged roughly 6 percent, the same homebuyer would only be able to afford a $165,000 home for $1,000 per month (including principal and interest)
Difference: $50,000
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- <p> <br /> <strong>FHA Conforming Loan Limit: $729,750</strong></p> <p> Price: $729,000<br /> Beds/Baths: 3/2<br /> Sq. Ft.: 1,250<br /> <br /> As you might expect in the country's most expensive city, New York residential real estate has the highest conforming loan limit allowed under law, $729,750. While in the chicer parts of Manhattan that'll get you beans, if you're willing to live a little south of the action, you can snatch up an apartment like <a href="http://realestate.aol.com/homes-for-sale-detail/500-Grand-St_New-York_NY_10002_M34853-29292" target="_blank">this three-bedroom</a> -- for only 3.5 percent down. <br /> <br /> See other <a href="http://realestate.aol.com/homes-for-sale-listings/New-York_NY" target="_blank">homes for sale in New York, N.Y</a>. </p>
- <p> That's ample space for a New York apartment. And with its gleaming hardwood floors and spic-and-span kitchen, this downtown dwelling strikes us as a pretty good deal. <br /> <br /> See more <a href="http://realestate.aol.com/homes-for-sale-listings/New-York_NY" target="_blank">homes for sale in New York, N.Y</a>. </p>
- <p> <br /> <strong>FHA Conforming Loan Limit: $729,750</strong><br /> <br /> Price: $729,000<br /> Beds/Baths: 2/2<br /> Sq. Ft.: N/A<br /> <br /> The country's second biggest -- and notoriously traffic-plagued -- city is also just about as expensive as it gets. Awesome views of Beverly Hills, Wilshire Blvd. and the mountains beyond are the highlight of this <a href="http://realestate.aol.com/homes-for-sale-detail/2170-Century-Park-E_Los-Angeles_CA_90067_M14045-21505?mlslid=11-555327" target="_blank">classy apartment</a>. <br /> <br /> See more <a href="http://realestate.aol.com/homes-for-sale-listings/Los-Angeles_CA" target="_blank">homes for sale in Los Angeles, Calif</a>. </p>
- <p> This apartment's building is set on a 3.5 acre lot that offers a pool, tennis court and fitness center. There's also valet parking and a concierge. But if you have pets... well, that's OK! The listing boasts of the building's "rare pet friendly environment." <br /> <br /> See more <a href="http://realestate.aol.com/homes-for-sale-listings/Los-Angeles_CA" target="_blank">homes for sale in Los Angeles, Calif</a>. </p>
- <p> </p> <p> </p> <div style="font-size: 10pt; line-height: 12pt; "> <p> <br /> <strong>FHA Conforming Loan Limit: $410,000</strong><br /> <br /> Price: $409,000<br /> Beds/Baths: 3/3<br /> Sq. Ft.: 2,000<br /> <br /> Chicago's conforming loan limit is substantially lower than those of Los Angeles or New York. At $409,000 this <a href="http://realestate.aol.com/homes-for-sale-detail/1444-N-Bosworth-Ave_Chicago_IL_60642_M89961-71095" target="_blank">duplex flirts</a> with its FHA-loan ceiling. The apartment's kitchen has a cherry-stained inlay floor with a breakfast bar. <br /> <br /> See more <a href="http://realestate.aol.com/homes-for-sale-listings/Chicago_IL" target="_blank">homes for sale in Chicago, Ill</a>. </p> </div>
- <p> In all, the home has 25 windows. If that's not enough to take in the views, you can venture out to the home's landscaped patio or enclosed balcony, "perfect for morning coffee," asserts the <a href="http://realestate.aol.com/homes-for-sale-detail/1444-N-Bosworth-Ave_Chicago_IL_60642_M89961-71095" target="_blank">listing</a>. <br /> <br /> See more <a href="http://realestate.aol.com/homes-for-sale-listings/Chicago_IL" target="_blank">homes for sale in Chicago, Ill</a>. </p>
- <p> <br /> <strong>FHA Conforming Loan Limit: $420,000</strong><br /> <br /> Price: $419,000<br /> Beds/Baths: 1/1<br /> Sq. Ft.: 822<br /> <br /> Our country's fifth largest city doesn't have property values as high as you might think. The relatively low median sale price of $305,000 pulls the FHA conforming loan limit down to $420,000. That delivers one bedroom and one bathroom in the case of this <a href="http://realestate.aol.com/homes-for-sale-detail/2101-Market-St-Unit-2605_Philadelphia_PA_19103_M43988-87151?mlslid=5875423" target="_blank">contemporary apartment</a>. Is the stunning skyline looming outside the apartment's floor-to-ceiling windows worth that sum? Your call. <br /> <br /> See more <a href="http://realestate.aol.com/homes-for-sale-listings/Philadelphia_PA" target="_blank">homes for sale in Philadelphia, Pa</a>. </p>
- <p> The hanging lights, gleaming marble countertops and hardwood floors make this space quite the flashy abode. But with only one bedroom, couch-surfing friends will probably have to take the, uh, couch.<br /> <br /> See other <a href="http://realestate.aol.com/homes-for-sale-listings/Philadelphia_PA" target="_blank">homes for sale in Philadelphia, Pa</a>. </p>
- <p> </p> <p> </p> <div style="font-size: 10pt; line-height: 12pt; "> <p> <br /> <strong>FHA Conforming Loan Limit: $271,050</strong><br /> <br /> Price: $270,000<br /> Beds/Baths: 4/2<br /> Sq. Ft.: 2,791<br /> <br /> The Loan Star State's real estate comes pretty darn cheap and Houston dirt is no exception. The FHA will only insure your loan up to $271,050. But, considering bang-for-your-buck value in the state, that means the government will sponsor some pretty comfortable digs. This <a href="http://realestate.aol.com/homes-for-sale-detail/11826-Orchard-Mountain-Dr_Houston_TX_77059_M77487-05012" target="_blank">2,791-square-foot traditional</a> home offers four bedrooms on its well-landscaped plot. If the place strikes a chord with you, be sure to make the open house this weekend. See the <a href="http://realestate.aol.com/homes-for-sale-detail/11826-Orchard-Mountain-Dr_Houston_TX_77059_M77487-05012" target="_blank">listing</a> for details. <br /> <br /> See other <a href="http://realestate.aol.com/homes-for-sale-listings/Houston_TX" target="_blank">homes for sale in Houston, Texas</a>. </p> </div>
- <p> Think back to that stylish Philly apartment. You know, the one-bedroom that cost in the neighborhood of $400,000? Now consider that this home's living room alone probably comes somewhere close to rivaling that apartment in total size. A reminder of just how much location determines value.<br /> <br /> See other <a href="http://realestate.aol.com/homes-for-sale-listings/Houston_TX" target="_blank">homes for sale in Houston, Texas</a>. </p>
- <p> </p> <div style="font-size: 10pt; line-height: 12pt; "> <p> <br /> <strong>FHA Conforming Loan Limit: $346,250</strong><br /> <br /> Price: $345,500<br /> Beds/Baths: 4/3<br /> Sq. Ft.: 2,707<br /> <br /> Located on a cul-de-sac, this <a href="http://realestate.aol.com/homes-for-sale-detail/2309-E-Lincoln-Cir_Phoenix_AZ_85016_M23878-69610 " target="_blank">Phoenix home</a> offers four bedrooms. At $345,500 it's priced close to $150,000 above the median sale price, allowing relatively well-heeled borrowers to take out substantial loans for as low as, you guessed it, 3.5 percent down. <br /> <br /> See more <a href="http://realestate.aol.com/homes-for-sale-detail/2309-E-Lincoln-Cir_Phoenix_AZ_85016_M23878-69610" target="_blank">homes for sale in Phoenix, Ariz</a>. </p> </div>
- <p> </p> <p> Landscaped with native plants and trees and sited near a mountain, this shingle-roofed house boasts generous space, an outdoor patio and even a backyard. <br /> <br /> See more <a href="http://realestate.aol.com/homes-for-sale-listings/Phoenix_AZ" target="_blank">homes for sale in Phoenix, Ariz</a>. </p>
- <p> </p> <div style="font-size: 10pt; line-height: 12pt; "> <p> <br /> <strong>FHA Conforming Loan Limit: $332,500</strong><br /> <br /> Price: $329,648<br /> Beds/Baths: 4/4<br /> Sq. Ft.: 3,106<br /> <br /> While the space may distinguish <a href="http://realestate.aol.com/homes-for-sale-detail/12714-Gladiolus-Way_San-Antonio_TX_78253_M88209-22757?ex=TX532033307" target="_blank">this home</a> on paper, the home's interior really seems to set it apart. There are stone-arched doorways, exposed-beam ceilings and black hardwood floors. All of it potentially attainable for just 3.5 percent.<br /> <br /> See more <a href="http://realestate.aol.com/homes-for-sale-listings/San-Antonio_TX" target="_blank">homes for sale in San Antonio, Texas</a>. </p> </div>
- <p> The decor of the place gives it an elegant glow. When you move from room to room, you might turn your head now and then. <br /> <br /> See more <a href="http://realestate.aol.com/homes-for-sale-listings/San-Antonio_TX" target="_blank">homes for sale in San Antonio, Texas</a>. </p>
- <p> <br /> <strong>Conforming Loan Limit: $271,050</strong><br /> <br /> Price: $269,500<br /> Beds/Baths: 4/3<br /> Sq. Ft.: 3,205<br /> <br /> Less than $300,000 gets you this <a href="http://realestate.aol.com/homes-for-sale-detail/3612-Sam-Rayburn-Trl_Dallas_TX_75287_M76951-58897?mlslid=11616329 median 210,000" target="_blank">gleaming new traditional</a>. The cream-colored interior's open floor plan and high ceilings make its 3,205 square feet feel even airier than it is. <br /> <br /> See more <a href="http://realestate.aol.com/homes-for-sale-listings/Dallas_TX" target="_blank">homes for sale in Dallas, Texas</a>. </p>
- <p> With soaring ceilings, classy upholstery and quite a bit of space this Texas house seems almost like a luxury home. If it is, then it's a luxury home that costs only $84 per square foot. <br /> <br /> See other <a href="http://realestate.aol.com/homes-for-sale-listings/Dallas_Texas" target="_blank">homes for sale in Dallas, Texas</a>. </p>
- <p> </p> <p> </p> <div style="font-size: 10pt; line-height: 12pt; "> <p> <br /> <strong>FHA Conforming Loan Limit: $729,750</strong><br /> <br /> Price: $729,000<br /> Beds/Baths: 3/2<br /> Sq. Ft.: 2,149<br /> <br /> Now move to <a href="http://realestate.aol.com/homes-for-sale-detail/1742-El-Dorado-Ave_San-Jose_CA_95126_M13376-23178" target="_blank">$339 per square foot</a> -- that's closer to the norm in San Jose, where the conforming loan limit, like its big brothers New York and Los Angeles, maxes out at the national limit of $729,750. <br /> <br /> See more <a href="http://realestate.aol.com/homes-for-sale-detail/1742-El-Dorado-Ave_San-Jose_CA_95126_M13376-23178" target="_blank">homes for sale in San Jose, Calif</a>. </p> </div>
- <p> In addition to this sun porch, the <a href="http://realestate.aol.com/homes-for-sale-detail/1742-El-Dorado-Ave_San-Jose_CA_95126_M13376-23178" target="_blank">ranch home</a> offers a well-landscaped front yard and backyard with patio on its 1/5-acre plot.<br /> <br /> See the more <a href="http://realestate.aol.com/homes-for-sale-detail/1742-El-Dorado-Ave_San-Jose_CA_95126_M13376-23178" target="_blank">homes for sale in San Jose, Calif</a>. </p>
- <p> </p> <div style="font-size: 10pt; line-height: 12pt; "> <p> <br /> <strong>FHA Conforming Loan Limit: $387,500</strong><br /> <br /> Price: $379,900<br /> Beds/Baths: 4/4<br /> Sq. Ft.: 2,831<br /> <br /> Ravaged by the foreclosure crisis, Jacksonville real estate values have plummeted over the last few years, allowing deals like this <a href="http://realestate.aol.com/homes-for-sale-detail/12213-Cattail-Dr_Jacksonville_FL_32223_M69954-43782" target="_blank">large single family</a>. Priced at $379,900, the home is just shy of the point where the government steps back and says: "It's 20 percent from here on out." <br /> <br /> See other <a href="http://realestate.aol.com/homes-for-sale-detail/12213-Cattail-Dr_Jacksonville_FL_32223_M69954-43782" target="_blank">homes for sale in Jacksonville, Fla</a>. </p> </div>
- <p> Who knew you could find a glass-enclosed pool just yards from a pond on a property below $400,000. An amenity like this, plus the home's exquisite, varnished interior should be a reminder that today's market is, undoubtedly, a buyer's one. Worried you're not up to financial snuff? In case you didn't hear, you can buy a lot of homes like this one for just 3.5 percent down.<br /> <br /> See more <a href="http://realestate.aol.com/homes-for-sale-listings/Jacksonville_FL" target="_blank">homes for sale in Jacksonville, Fla</a>. </p>
- <p> </p> <p> </p> <div style="font-size: 10pt; line-height: 12pt; "> <div style="font-size: 10pt; line-height: 12pt; "> <p> Find <a href="http://realestate.aol.com/blog/homes-for-sale/" target="_blank">homes for sale in your area</a><br /> See <a href="http://realestate.aol.com/blog/gallery" target="_blank">more <em>AOL Real Estate</em> galleries</a><br /> <br /> GALLERIES:<br /> <a href="http://realestate.aol.com/blog/2011/08/21/homes-for-less-than-100-000-youd-actually-want-to-buy/" target="_blank">Homes For Less Than $100,000 (You'd Actually Want To Buy)</a><br /> <a href="http://realestate.aol.com/blog/gallery/monster-houses/" target="_blank">Monster Houses</a><br /> <br /> VIDEOS:<br /> <a href="http://realestate.aol.com/blog/category/my-next-move" target="_blank"><br /> My Next Move: Homebuyers Share Their Stories</a><br /> <a href="http://realestate.aol.com/blog/2011/08/22/is-that-house-worth-the-asking-price-video/" target="_blank">Is That House Worth the Asking Price?</a></p> </div> </div> <p> </p>
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