$11 per thousand of sales price

Jim Porter

Solano Real Estate Scene: Jim Porter

Article By: Jim Porter – February 16, 2024

I started my career in Vacaville working for Weyerhaeuser Mortgage Company in 1989, and I remember being able to quote estimated house payments to first-time homebuyers without using a calculator.

Mortgage rates were around 10% and the house payments for veterans buying with nothing down and families getting in with a 3.5% down payment FHA loan were always around $11 per thousand of sales price.

A house for $150,000 was around $1,650 per month, and a $200,000 home would usually run $2,200 per month (PITI) principle, interest, taxes and insurance. It wasn’t a bait-and-switch ploy, but lenders and Realtors would often round down to $10 per thousand because it sounded better, and it was easier math.

Today, that $150,000 house is $500,000 and that $200,000 home is going for $600,000 and the estimated payment factor for homes that are not in high property tax neighborhoods ranges from $7.50 to $9 per thousand depending on FICO scores.

Today, unlike 1989, FICO scores make a huge difference in rate and PMI cost. Today, a $600,000 home for a first-time homebuyer with a 750 FICO score, a minimal down payment, in a low property tax neighborhood could be looking at $4,400 per month and for those with a 680 FICO in a high property tax area as much as $5,400 per month.

This sounds like a lot but so did $2,000 to $2,200 per month back in 1989 and now all those scaredy cats own their homes free and clear.

House prices have tripled since 1989 but house payments have only doubled for high FICO people and have risen by 250% for others. The median household income in Solano County for 1989 was $39,113 and in 2022 was $97,037, up 250% from 1989.

Buy a house and stop paying your landlord’s mortgage.

Jim Porter, NMLS No. 276412, is the branch manager of Solano Mortgage, NMLS No. 1515497, a division of American Pacific Mortgage Corporation, NMLS No. 1850, licensed in California by the Department of Financial Protection and Innovation under the CRMLA / Equal Housing Opportunity. Jim can be reached at 707-449-4777.

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