Fuel prices’ impact on “where to buy” decisions

if you live an additional 10 miles away from work, that means that (most likely), two cars are driving an additional 20 miles a day – an extra 40 miles per day. Stay with me here.

For every $100 in mortgage payment, one can afford an additional $16,000 of a home.*

Assuming gas remains around $3/gallon, and that a vehicle gets 20 mpg, a family would be paying at least an additional $6 per day in fuel costs.

Using these assumptions (not bad for an English major!), that additional 10 miles further equals an additional $180/month and an extra $2160/year.  Thus, if you live a little bit closer, you could purchase a $232,000 home rather than a $200k home. If you have kids, factor in the soccer practices, tae-kwon-do, dance lessons, etc. and living closer makes more sense than ever – now if one can just find one of Dennis Rooker’s $225k townhouses …

*Using 6.125% 30yr fixed thanks to Carl.

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