INTEREST RATES that is. For any of us that had mortgages in the 8% range once upon a time, or even second loans in the 12’s, it’s incomprehensible that rates have fallen to the lows that they currently have. News reports show rates at a low not seen since 1971.
No wonder so many renters are scrambling to find the funds to purchase now. With rates this low, monthly mortgage payments are often less than rental rates.
And considering that a larger percentage of the payment actually goes towards the principal, buyers are building equity faster than in previous real estate markets.
The inventory shortage isn’t lost on landlords – rental rates are certainly on the rise. Supply and demand rules and real estate is no exception. Just as there is fierce competition for many homes for sale, the same is true with the rental market. And as buyers must meet stringent finance requirements to borrow money, tenants too are put through the rigors of credit checks to make sure they have a track record of on time payments.
So a common question I hear is – should I rent or buy ? Read some thoughts about this from my October 2011 blog on the topic. And notice that the example I used for average rental rates for a 1500 sq. ft. home then was $2000 per month. A quick check of rates for those same sized homes this year, shows monthly rents ranging from $2350 - $2500.
The biggest obstacle then is finding the down payment money J
Comments(3)