Home Mortgage Rates Are Rising...Should I Rent Or Buy?

As you listen to the news or surf the internet no doubt you have heard that interest rates are rising.  In fact they have finally climbed back over 4%.  Yes,  I did say 4%.  Potential home buyers are getting nervous tht the increae in rates will hinder them from buying a home.

The truth is that interest rates were to low and had to eventually climb back up as the federal government startign stepping back form backing the mortgage loans and private insurers are now doing it.  The reason is the government stepped in to help spur the housing market and drag us kicking and screamig out of the housing recession.  It took a lot longer than anyone thought but it finally has started to work.  Now with prices increasing gradually and the market stabilizing it is time for them to step away and let private investors back in.  The problem is they want a larger return on thei investmetn than the government does.  Thus the increase in interest rates.

But just becuase rates have increased over 4% should you not buy a home?  Three and half years ago I purchased a home at 5% interest rate and nver thought I see a rate in the four's when I got that.  But just becuase rates ahve increased slightly does not mean you should not be looking to buy a home.

  I read a few articles that talked about this and did soem research in the Charlotte, NC. market to see what I could find out on buy versus rent.  The average rent for a three bedroom apartmetn in Charlotte is $1086.00 a month.  The average rent for a three bedroom house is $1450.00 a month.  Depedning on the area and neighborhood you are looking in that price could be signifcantly higher.

Factor i that you can buy a $150,000 to $250,000 house for the same payment that a rent would cost you on an apartmetn or a house.  Would you rather own and gain equity and other beneftis to owning a hoime or rent and let someone else make money off of you?

Even with interest rates over 4% it still is better to buy than rent.  In fact a few economists said thsat with average home prices in the top 20 cities and average rents in the same cities that the inerest rate would have to hit almost 10% for it not to be worth owning a home....That is a signifcant increase in rates that I do not think we will see.

I beleive the time is right to own a home.  The question is not whether you should buy;  but do you want to buy a home.  A lot of peopl for a variety of reasons do not want to own a home right now.  That is fine.  But if you are on the fence now is the time to pull the trigger.  Prices have been steadily increasing over the past few months, inventory levels are at all time lows, and interest rates are rising.  If you were waiting to see the bottom.  We were there a few months ago and now are climbing out.  Evidence suggests that we will be only going up form here as well...

Dave diCecco
Realtor/Broker
Coldwell banker United
Cell:704-519-7895
ddicecco@cbunited.com
www.davedicecco.com