Housing costs stay relatively level despite increasing home values

How much does it cost on a monthly basis to buy the median price home in our area, assuming 80% financing?  Today, that adds up to an $681 monthly payment -- which is right in the same ballpark as what we've seen for the past two years ($850, $856).  How can housing costs be staying relatively level if home values are increasing?  Well, it's the declining mortgage interest rates, of course!

The graph above shows how much you would pay in a monthly payment for each of the past 16 years if you financed 80% of the purchase price at the average interest rate for that year.  These payments include an estimate for your insurance costs, and property taxes based on Harrisonburg's current rate of $0.80 per $100 of assessed value.

Another pretty wild perspective -- over the past 16 years, housing costs (understood as outlined above) have only increased by 9.6%.