Stop Making Your Landlord Rich

Dated: 04/25/2019

Views: 131


Renters Paying Substantially More While Owning Costs Less

Renters Paying Substantially More While Owning Costs Less | MyKCM

In a recent Insights Blog, CoreLogic reported that rent prices have skyrocketed since 2005. Meanwhile, the typical mortgage payment has actually decreased.

“CoreLogic’s national rent index was up 36% in December 2018 compared with December 2005, while the typical mortgage payment was down 4% over that period.”

Renters Paying Substantially More While Owning Costs Less | MyKCM

Why the difference between the costs of renting versus owning?

It makes sense that rents have risen. However, how did mortgage payments decrease? CoreLogic explained:

“It’s mainly because mortgage rates back in December 2005 were significantly higher, averaging 6.3% for a fixed-rate 30-year loan, compared with 4.6% in December 2018.

The national median sale price in December 2005 – $190,000 – was lower than the $220,305 median in December 2018, but because of higher mortgage rates in 2005 the typical monthly mortgage payment was slightly higher back then – $941 – compared with $904 in December 2018.”

Additionally, a recent report by the National Association of Realtors (NAR) showed that purchasing a home requires less of your monthly paycheck.

According to the Economists’ Outlook Blog, NAR’s February 2019 Housing Affordability Index showed that the “percentage of income needed” to pay the typical mortgage has decreased the last three months.

  • November – 17.3%

  • December – 16.9%

  • January – 16.2%

  • February – 15.9%

Bottom Line

What does this all mean to the current housing market? We think First American said it best in a post last week:

“The mortgage rate-driven affordability surge has arrived just in time… Rising affordability has already benefited home buyers and, if the lower rate environment persists, we’re in for a great spring home-buying season.”

Want to Advertise on this Site?

Latest Blog Posts

Jun 13 2019 64372 1

LOVING YOUR HOME AND YOUR DOG By:  REBAC Staff Posted:  05/13/2019TwitterFacebookLinkedIngoogle_plusMany homebuyers love dogs but don’t always love the results of

Read More

Jun 6 2019 53828 1

4 Reasons to Buy A Home This Summer Here are four reasons to consider buying today instead of waiting. 1. Prices Will Continue to Rise CoreLogic’s latest U.S. Home Price

Read More

Moving Matters

Is a move on the horizon? Find out what motivates Americans to move, how long it takes them to find the right home, what they’re looking for in a home, andso much more. When you’re ready to take

Read More

Reducing Radon In Your Home

5 Frequently-Asked Questions About Reducing Radon In Your Home If your home has radon, how do you get rid of it? You have a few options. Find out

Read More