Purchasing Power


A buyer’s purchasing power is now greater than ever. Purchasing power is defined by how much goods and services one can receive for their money. In our case, it refers to what type or size of house you can purchase. Since interest rates are now low, one can now buy a more expensive house at the same price but pay less in the long run.

Let’s take a look at the following example:

John Doe can only afford a $2,000 monthly mortgage payment (principal and interest).

The average mortgage rate currently in 2021 is approximately 3.1-3.3% while the average mortgage rate in 2019 was 4.45%. So, let’s make a basic calculation. If in 2019 John Doe bought a house with a loan amount of $410,000, assuming a 30-year fixed rate mortgage of 4.45%, his monthly principal and interest payment would be $2,065. However, if he were to purchase home in 2021 with a loan amount of $480,000, assuming a 30-year fixed rate mortgage, his monthly payments would also be approximately $2,076. That means that for the same amount of money, John can now afford a home that is over $70K more expensive than he could have purchased it for in 2019. (All prices and rates are on average. Rates and monthly payments are taken from Google mortgage calculator.)

That’s Amazing!

And you can be John Doe. You can afford more home with the same monthly payments because the rates are so low. This is one of the reasons I see an overabundance of vacant rentals because many people are choosing to buy now.

Electric Bill Overload

I am sure by now many of you have seen a difference on your electric bills. If you’re in the city your air conditioner is probably running full time. Here are some tips on how to save a little bit on your bill.

1. Cover your windows. Solar screens or mesh-like window screens are effective in blocking most of the heat that will enter via the windows. Window films are another great option, but they only work if the windows are closed.

2. Many times, we get home and we are boiling! We run over to the thermostat and turn it as low as possible. This does not cool your home any faster and can result in a bigger electric bill because of the excessive cooling. I know it’s hard to break this habit, but perhaps you can arrange a timer or a smart thermostat that will start the A/C at a normal temperature before you get home, so your house is cool to enter.

3. Give your A/C some TLC. An inefficient air conditioner raises your cooling costs. It’s running but not doing its job so well. Your filter should be cleaned at least once a month in the summer and even more if you have a dusty home or own furry pets. And if your A/C needs a little bit more help, hire a professional technician. It will save you money in the long run.

4. There’s a reason why barbecues are super popular in the summer. They keep the heat out of the house. Try to reduce the use of your stove and oven, especially midday. And I’m sure your family would be more than happy with a cool meal in the summer. Salads, fruit, and sandwiches are always delicious options.

5. Seal the leaks. We all know that feeling of having our A/C running full blast, but our kid left the door open. Check the most obvious leaks first, windows and doors. And then do a visual check inside and outside looking for any gaps the cold air can escape through.

Good luck battling the summer heat y’all! Feel free to share any other money-saving techniques with me. I’d love to expand my list. One place to reach me is my Instagram @TheBehfarTeam. Can’t wait to hear from you!